This Time Next Year We’ll All Be Millionaires…

I look at investment vs gambling. In the postscript – speed and the danger thereof.

Market Commentary

Interest rates remain stubbornly high while economists argue about when they'll come down - proving once again that if you laid all the economists in the world end to end, they still wouldn't reach a conclusion.

The Quick Buck Stops Here - Short-Term Investing

Remember when your grandmother told you a watched pot never boils? Well, a watched stock portfolio rarely grows either, yet countless investors spend their days glued to trading screens like teenagers checking their social media feeds.

The allure of short-term investing is powerful - it's the financial equivalent of trying to lose weight through crash dieting instead of adopting healthy eating habits. Just as you can't get six-pack abs from one day at the gym, you can't build reliable wealth from frantically trading meme stocks based on Reddit tips.

I recently had a client call me about a "can't-miss opportunity" in cryptocurrency. "It's gone up 300% in the last week!" he exclaimed. "Yes," I replied, "and tulip speculation went up far more than that a few years back…." History doesn't repeat itself, but it does tend to rhyme - usually to the tune of "I shouldn't have done that."

Short-term investing is gambling whilst hypothetically wearing a business suit with day traders often displaying the same behaviours as casino enthusiasts:

• Believing they've found a "system"

• Checking their phones every 3 minutes

• Using terms like "sure thing" and "can't lose"

• Explaining their losses as " temporary setbacks"

• Having a spouse who's considering plan ‘B’

Summary

The truth is successful investing is like growing stuff - it requires patience, consistent care, and resistance to the urge to dig up your seeds every day to check if they're growing. Warren Buffett didn't become wealthy by day trading; he got rich by being patient.

p.s.

Speaking of time, I remember the early days of online trading. Back then, we thought waiting 15 minutes for the dial-up internet to connect was unbearable. Now people complain when their instantaneous stock trades take a full second to execute. Of course, new apps make trading easy – but this can be a bit like saying quicksand makes sinking easier, particularly in the short term...