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Jay Mooreland

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It’s About TIME

By: Jay Mooreland on July 27, 2015

Picture ClockTime is our friend; in fact it may be our best friend. Time is a unit of measurement that accounts for the passage of events. It is continuous and once it has passed can never be regained. Learning to use time wisely can be of significant benefit to us – both now and in the future.

 
A TIME for Preparing

keep-calm-and-prepare-yourself-1I enjoy listening to Barry Ritholtz’s Masters in Business podcast. He interviews some of the most prominent and influential individuals in finance and economics. When asked about their success, just about every person has said a lot of their success was due to luck. Much of success in life is when preparation meets opportunity (lucky break). Personal experience has proven that to be true. Of things in my life that I view as helping me be “successful”, I would say most of it can be traced to a lucky break (or several lucky breaks). Fortunately I was prepared when those breaks came.

So how are you spending your time today? Is your time spent improving yourself and preparing for whatever opportunity may come your way? How about spending time with those that care about you as a person, and not just about you as a revenue source? Are Facebook and Instagram (and others) crowding out more productive and meaningful uses of your time? Time, unlike money, is irreplaceable. Use it wisely.

 
A TIME for Prospering

Time is one of an investor’s greatest asset. Unfortunately, most investors do not take advantage of it. Investors are so caught up with short-term performance that they often do not allow time to work for them. Of the two charts below, which would you prefer your investment account to look like?

Chart A or B for LT Return

 

This is a no brainer. Chart B is superior to Chart A. But here is the catch. They are both of the S&P 500. In fact, Chart A was taken from within Chart B. The purple dots on Chart B represent a 9 month period of time from which Chart A was created. (And yes, 9 months is a short period of time). So those investors who do not like what Chart A looks like, and are influenced to sell given its frustrating, trend-less performance, would not be able to enjoy the gains of Chart B. The important takeaway is that great long-term securities can look downright awful over short periods of time.

Security returns are unpredictable and random in the short term. Jason Zweig has said that short-term security prices are tied to investors’ moods. Investors that are able to use time wisely in the investment realm may find their personal rate of return increase without having to increase their risk.

 

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