Patience - Key To Savings

Have you ever realized that the only appetite that can never be satiated is the appetite for money? We relentlessly pursue financial gains and material possessions, which always seem less, no matter how much we earn. But if this insatiable quest for money can be used for constructive purposes, such as for long-term wealth building, it can secure our future by making it financially stable. 

The virtue of Patience:

So, what is the best method to use if you want to convert your desire for money into a skill that can lead to financial independence and a comfortable life free of monetary stress? Here comes the virtue of patience in investing. You might be a short-term trader in the stock market with a high level of risk appetite or a long-term investor who is looking to save for child's education, buy a property or plan for retirement. In both the cases, patience along with a disciplined approach, is the key to success. It keeps sudden emotional and ignorant decisions at check, help in intelligent and sharp judgement by accumulating knowledge and information relevant to the situation. 

Sudden ups and downs in financial market is inevitable. Such fluctuations multiply the possibility of risk. However, the urge to make quick money without taking the time to understand the market and not adopting strategies and methodologies that will help us navigate the risks and achieve our financial goals is the ultimate reason of huge losses. No matter how many books you read and how many tips and tricks you learn for better investing, there is no path leading to quick success. A few examples will clarify this fact. 

Example: 

Short-term trader:

Jason Carter, a 35-year-old short-term trader based in New York, started trading stocks part-time while working in finance. Unlike impulsive traders, Jason developed a disciplined strategy that emphasized patience in both entry and exit points. 

Investment approach - After picking stocks with strong fundamentals and high trading volumes along with proper technical analysis he could identify the correct entry and exit points for a successful trade. He picked Next Vision Inc. as a great opportunity. After a short-term dip due to market fears, he patiently waited for confirmation near the $220 support level. He later entered with a target of $290. Over the next month, the stock rebounded, and Jason exited at $280, locking in a 27% gain.

Results Over the Years:

By maintaining patience in the stock market and sticking to his strategy, Jason avoided emotional trading and steadily grew his portfolio. Over the past two years, his disciplined approach has helped him achieve a consistent 25-30% annual return, proving that patience is an integral part of financial success. 

Long-term investor:

Sarah Mitchell, from Austin, Texas, is a former nurse at a reputed hospital. Her investment journey started in her early 30s. Her goal was a comfortable and financially secured retirement. A patient investment strategy, through diversification and consistent contributions, lead to creation of a huge corpus.

Investment Approach : 

• Sarah consistently invested $1,000 per month into a diversified portfolio.
• Broad Diversification – She split her investments between Index Funds (50%) – S&P 500 (Vanguard VOO) and Total Market Index Funds.
• Dividend Stocks (30%) – Companies like Coca-Cola, Pfizer Inc. and Johnson & Johnson.
• Growth Stocks (10%) – Tech giants like Amazon, Apple and Netflix.
• REITs & Bonds (10%) – This was for stability and low-risk return. 

Above all, patience in investing, helped her control panic during downturns, and remain invested through the financial crisis of 2008 and the COVID crash of 2020. She kept reinvesting her dividends and purchasing more shares during dips.

Results Over the Years:

At 65, her portfolio was over $3.5 million, due to the compounding effect and disciplined investing. Sarah comfortably retired, and enjoyed her travels and hobbies, by using her passive income from dividend stocks and diversified portfolio. 

Conclusion:

Therefore, patience in the stock market or any kind of investment option, helps you to spend time in the market, and not try your hand at timing the market. It is a virtue that gives the capacity to tolerate delay and frustration and make informed decisions through proper communication. Do not allow attractive short-term profits to make you a captive of losses in the financial market. 

More resources:

• Quant Funds - Algorithms Redefining Investment Strategies
• Quit Jobs To Trade In Stocks?
• Undervalued Stock - A hidden gem
• Manage Loans During Your Job Tenure