• Notification Date: 24-02-2025
• Notification No: N/A

The Secret to Long-Term Stock Market Success: Patience Over Trading

In this age of fast-track investing, people take it for granted that returns come from quick trading and market timing. However, according to great investor Charlie Munger, real money is made doing nothing but waiting. Munger's wisdom is unequivocal: achievement is not about frequent purchases and sales but the endurance to wait through your investments regardless of what happens in the markets.

A simple example makes his point. If you invested in an index fund that tracks the stock market 20 years ago and held on, you would have doubled your investment a number of times—thanks to the economy's growth over the long term. This wasn't as a result of trading or predicting the market, but the simple act of holding on.

In this era of instant gratification and round-the-clock market news, it's tempting to make frequent trades. But most investors forget that frequent portfolio churn tends to carry high transaction costs and taxes, which can cut into long-term profits. The real test is holding onto good investments and avoiding acting on impulse.

The smartest investors are those that understand that the key to growing wealth is not activity, but patience. Munger's secret: the toughest part isn't figuring out what to do—getting the self-discipline so that your investments have time to work is the challenge.