As we discussed previously, vision is the first and the most important step, as a good story starts with a good dream that helps one in preparing for the future. Vision is followed by the courage to buy- where one has to execute the step one. But these two points do not help one in getting wealthy, until and unless he follows the 3rd important step- Patience to Hold…
While speaking about Market participation, most tend to have the Misfortunate feeling or Dissatisfaction. The condition is not different for even successful investors who have the regret feeling.
“If I would have kept that ‘Stock’ in a hold, I would have been rich” is a common phrase we hear nowadays. A good friend of mine once used to hold 900 quantities of Eicher Motors @ Rs.300/ stock. That time, it was worth Rs 2.70 Lakhs. He booked profit when he got around 15% returns. He was so eager to sell them in a hurry burry and didn’t have the patience to hold for long run. In due time, the conditions changed and the stocks have touched Rs. 32,000 this year. The same 900 stocks he had then, is worth Rs. 2.88 Crores!!! He lost a great opportunity, just due to Impatience…
This is just one story among thousands; we come across in our day to day lives.
Basically, there are two kinds of Impatience:
(i) Selling off to get an immediate return, when you see a slight profit (as we read above)
(ii) Panic Selling- Normally when the markets drop, people suddenly get extremely surprised, upset, angry, or confused. They believe they are about to lose all their money. Due to this, they sell off their holdings for whatever price they can get.
Patience is what we need when it comes to market particularly when it comes to investment, to buy and hold. It’s because, no one can time the markets. But at the same time, it is the quality lacked by many. If you are certain there is nothing wrong in the fundamentals of the company, hold them. As long as its long-term potential is intact, in such stocks we should give enough time to play out the story and become a wealth creator.
Volatility is the inherited nature of the market sometimes up and sometimes down but if you look the long run trajectory of the market you can see it is moving towards an upward direction. And you can see that the stocks once fallen are gradually picking up and the same stocks one planned off disposing of for a cheaper price/ lesser profit will surely help them to make a fortune in a longer-run…
If one thinks there’s more growth potential, it is always advisable to continue owning them. Whereas, if one thinks they have reached their peak, he could sell them and wait for them to drop back in order for him to buy again at a lower price later.
Moral of the Story
Qualitative skills like patience and discipline are equally important as quantitative or analytical, skills when it comes to investing. One doesn’t have to know about every company listed in the Market, he just needs to know a few very well and trusts in his analysis and decision.