The Importance of Patience and Discipline for Active Investors

The Power of Patience and Discipline for Active Investors

April 22, 2023

In the good old days, traders knew the importance of patience and discipline in trading. These virtues combine to create a force that can weather any storm. In today’s modern era, the same holds true for active investors.

Patience means waiting for the right entry point and allowing the price to touch the boundaries set by your trading strategy. This takes time, but it’s essential to success. Discipline means keeping emotions and snap judgments in check. Due diligence and quality research should inform your decisions about when to get in and out of trades.

The Importance of Discipline and Patience

Discipline and patience in trading put you in a small group of traders who can consistently benefit from the fear and greed of others. These virtues are of paramount importance. Without them, you’ll lose in the long run, regardless of your investment skill set.

Many good traders lost everything due to the dangerous belief of “go big or go bust.” Today, we know that a more measured approach is the key to success.

Contrarian Thinking in Action

In today’s fast-paced market, it’s essential to take a contrarian perspective on active investing. Instead of following the crowd, successful investors look for opportunities that others are overlooking.

In 2022, the markets were incredibly volatile, but the Main (Tactical Investor) Portfolio weathered the storm. Twenty-one positions were closed for profit, and only three positions were sold at a loss. Despite some positions being underwater, the Main Portfolio still beat the markets.

Building a Measured Approach

In 2023, the Main Portfolio is off to a good start with ERO. The key to success is to assess your risk profile correctly, deploy equal amounts of money into each play, and not focus only on high-risk positions. Use profits to get into higher-risk positions and take money off the table when profits are rolling in. Always keep cash on hand for those mouth-watering opportunities.

Achieving Long-Term Success

For active investors who are looking to achieve long-term success, patience and discipline are two of the most important virtues to cultivate. By taking a contrarian approach, building a measured approach to investing, and staying focused on long-term goals, active investors can weather any storm and emerge stronger on the other side.

In summary, the power of patience and discipline cannot be overstated for active investors. By embracing a contrarian perspective, building a measured approach, and staying focused on long-term success, investors can build a profitable and sustainable portfolio that can weather any market conditions.

FAQs – The Power of Patience and Discipline

1. What is the importance of patience and discipline in active investing?

Patience means waiting for the right entry point and allowing the price to touch the boundaries set by your trading strategy. Discipline means keeping emotions and snap judgments in check. These virtues are of paramount importance in active investing and can help weather any storm.

2. Why is a measured approach important in active investing?

A measured approach is important in active investing because it allows investors to assess their risk profile correctly, deploy equal amounts of money into each play, and not focus only on high-risk positions. This approach can help build a profitable and sustainable portfolio that can weather any market conditions.

3. What is a contrarian perspective in active investing?

A contrarian perspective in active investing means taking a different approach than the crowd and looking for opportunities that others are overlooking. This approach can help investors achieve long-term success.

4. How can active investors achieve long-term success?

Active investors can achieve long-term success by embracing a contrarian perspective, building a measured approach to investing, and staying focused on long-term goals. By doing so, investors can weather any storm and emerge stronger on the other side.

5. What is the impact of patience and discipline on investment success?

Patience and discipline in trading put investors in a small group of traders who can consistently benefit from the fear and greed of others. Without these virtues, investors may lose in the long run, regardless of their investment skill set.