In a world addicted to instant gratification, the greatest investment advantage lies in patience. High quality, «boring» stocks are persistently undervalued and offer superior returns over time. This challenges conventional wisdom and proves: boring is good.
The more risk you take, the higher the return.
We would intuitively agree with this statement, and it would confirm the efficient market hypothesis.
Financial markets are «efficient» in the sense that an investor cannot consistently achieve returns above the average market returns on a risk-adjusted basis. Put simply; to achieve higher returns in the market, one must accept more risk.
Evidence is mounting, however, that what may be true in theory, according to our gut instincts and from academia, is not necessarily the case in practice – where people driven by emotions are anything but rational. This is where the big missing mosaic piece comes into play that I find so absent in today’s fast-paced world.
A long-term horizon and perspective. Or the strongest investment habit you can have:
Patience.
Quality has outperformed most other factors
Share with your friends. Your support means the world to us.