Know When to Hold'em, Know When to Fold'em - Holdun

No wonder this has been a difficult year, even the so-called experts don’t know when to HOLD’EM. The chart below illustrates that in the ten months since Royal Bank of Scotland analyst, Andrew Roberts issued his headline-making call to “sell everything”, most assets have soared.

Chart shows investors would’ve been crazy to heed calls to ‘sell everything’
By Sue Chang Published: Sept 23, 2016
Oil, stocks, emerging markets have all posted double-digit returns

This reminds me of Blaise Pascal’s famous quote “all of humanity’s problems stem from man’s inability to sit quietly in a room alone”.

We know that investing is going to require being uncomfortable from time to time. But getting comfortable with being uncomfortable leads to a better result over time. Successful long term investing is really about being disciplined enough to deal with uncomfortable moments along the way as we have experienced this year in spades. I have often said, ignore the noise and concentrate on remaining true to your investment policy. Remember, your greatest advantage as an individual investor is a long term orientation.

Consider the story of the Voya Fund which was created in 1935 and has not purchased any new stocks since then.

What is absolutely remarkable is that the fund has outperformed the market over the last 40 years without any activity. Investing is not a game where activity helps. The more you trade the worse your returns will likely be. Great businesses tend to stay great for long periods of time. Selling them is like slaughtering the golden egg laying goose for food. It’s not a good idea.

Investing should not be complicated. Do as we do. Buy high quality dividend growth stocks with durable competitive advantages and HOLD’EM.