Have you heard the phrase “patience pays?” This phrase can be applied in the case of stock markets too! There is a common saying in the world of stock markets, “time in the market beats timing the market.” If you have ever taken part in stock markets, then you must have heard these phrases that stress the importance of patience in stock market wins. But have you ever paid heed to the role that patience can play in your success? Let's understand why patience is an important ingredient for stock market success in the long run.
Are you the one who expects instant results from trading? Well, you are not alone, as in this world of instant everything from coffee to noodles, it is only natural to expect instant results in stock markets too! If you are a newbie or a pro, you must remember one thing, the stock market does not run on your timeline.
If you see quick gains as a norm, you might be looking at a massive roadblock in the near future. Never run after those “get rich quick” schemes, which are like mirages in a desert. Just let time do the magic, all you do is plant a tree and give it the time to grow. You can only enjoy the fruits and the shade of a tree when the tree is all grown up, so have some patience!
The perfect way to describe the movement of the stock market is it moves in cycles. One day it is completely good with prices climbing, while the next day it can be a complete mess with your portfolio ruined completely! What do you do in such cases? Don’t panic and have patience.
All you need to do as a trader is to stay patient and come out stronger on the other side. During major historical crises like the dot-com bubble, the crisis of 2008, or the pandemic crisis, traders who stayed patient and held through these rough patches came out as highest gainers and winners.
Patience can be your umbrella on a stormy day in stock markets, while it can act as your sunscreen when the sun is shining bright. Just have patience and see the magic happen!
Compound interest was referred to as the eighth wonder of the world by Albert Einstein. Honestly speaking, we don’t think that it was an exaggeration in any way! Compounding helps your bucks earn returns and then those returns earn more returns. Have you ever seen a snowball rolling downhill? It keeps picking snow to get bigger. Compounding is the same as well.
But let’s face it, compounding needs time to work its magic! If you want more exponential growth, then you need to be patient and stay longer in the markets. A stock that could have earned you 2x in 10 years can earn 20x in 20 years with the power of compounding.
Manage your emotions well if you want to succeed as a trader in stock markets. You can easily feel invincible when the markets are up, but the urge to sell becomes overwhelming when it takes a nosedive. Isn’t it? This is where patience comes in as an emotional anchor, reminding you to stick to your strategy and not make rash decisions.
The stock market has always been an instrument that transfers bucks from the impatient to the patient. If you get swayed by short-term noise, then you are bound to fail completely. Wait for the right opportunities and see the magic happen.
Want to exercise patience? Make use of the dollar-cost averaging strategy. This is a strategy that allows you to trade in small amounts at regular intervals, regardless of what condition the market is in! When the market is up, you get a less quantity of shares and when it is down, you get more shares at the same cost. You can easily even things out and reduce the impacts of market volatility with this strategy.
However, to get perfect results, you need to use patience in action, which is consistency. Let the market work for you and not predict the market by staying patient and consistent.
Building patience when constant ups and downs are messing things up in your head is a tough job! Let’s dive into the ultimate hacks to do the same.
The first thing to do is to set clear goals and be clear in your head! You can easily focus on the long term if you have clear goals in your head like retirement, owning the dream house, or even having that destination wedding.
As a successful trader, you really need to ignore all the surrounding noise of daily stock prices. Quit obsessing over them and instead focus on your overall strategy and check periodically.
Educate yourself and upgrade your knowledge with time to stay updated about the trends in the markets. Your knowledge regarding the markets will help you to stay immune during downturns.
Diversify your portfolio as much as you can to make sure that you do not lose patience when one area underperforms. Spread your portfolio across different asset classes and reduce risks that might hamper your growth otherwise.
Even if you are making slow progress, it is worth the wait and you should recognize and celebrate each win. Even if it is minimal, growth is growth, no matter what!
The world currently is obsessed with speed and relies on instant items. Patience feels like an outdated virtue in the present times. But remember that in stock markets, patience is the superpower that you must have. If you want to separate yourself from the losers in the market, have patience! Never make a knee-jerk reaction in stock markets, and always try to stay on course while not making rash decisions to get fast growth. In stock markets, slow and steady wins the race.
