Patience as a virtue in investing

Most successful market beating investing strategies tell you to buy the right company, pay the right price and wait for the market to realise your foresight.
These strategies in themselves are great- take for instance the first that says you should buy the right companies- Isn't this the obective of every investor. the second also advises that you pay the right price- how do you establish the right price?
With the third, there is a little problem while you are waiting, it is your maoney that is at risk in the period.

From the time you make your purchase to the time your investments workout; the market would have its own ideas as to how much your companies are worth. Obviously, there would be times it doesn't agree with you.


It has been said that patience is a virtue in investing. However when you are looking at a sharp drop in price so after buying a stock, it is tough to be patient without having irregular heartbeats. Fortunately, there is a way of reducing all the anxiety by insisting on being paid while you wait. this is by buying companies that pay their owners well via dividends and look most likely to continue.This way even if it takes a while for the market to catch up with your thinking, atleast you are getting some cash for your efforts. However, there is a caveat here, to beat the market over the long haul, those businesses must be backed up with solid businesses and staying power. if a company has an attractive yield but a weak business, the dividends would surely cease. Therefore, the business must pay attention to the business behind the stockin order to be in a position to know when the dividend is at a risk.
In spite of this, patience is needed throughout the cycle of any investment ie at the entry(buying), holding and sale(exit). Lets now consider the role of patience in these scenarios.

Waiting for Entry
The investment process usually starts with determining an acceptable entry position for an identified stock. With this in mind, you are expected to wait for the price to reach your target entry point. Unfortunately, rather than moving towards the price, the stock hovers far above your stated position. This ordinarily pushes you to panic. and buy at a price higher than what your strategy dictates. Having done your homework and developed a plan,emotions can undermine your capacity to achieve your long term goals, hence the need to focus on the long term objective. It has been proven that impatient investors who violate their disciplined plan usually ended down the path of ruination.
Following a predetrmined strategy keeps the emotional side of investing at bay. Waiting for the right entry point is the essential characteristic of every successful investor.


Searching for winning positions
Patience in investing is similar to that experienced on the high seas while fishing. There are many fish in the sea and it is not essential to catch every fish that comes your net's way.It is important to note that there are many investment oppurtunities in the market, so the difficulty is not so much in finding oppurtunities but in making sure they fit into your sset plan.
The fact is that catching those few that meet your criteria is the mostimportant objective. It is vital that you concern yourself with good entry points while making sure that you have defined exit points. Having done this, even if the stock deviates from your set plan and you are sure for the underlying reasons for buying, dont panic, BE
PATIENT.

Though on the contrary, there are times that inspite of your faithfulness and patience, the price of your stock barely moves. With this it is important to re-examine your analysis of the stock. In many cases, this may be as a result of the market's interest in other sectors at the time being and this also buttresses the need for patience.



By and large, most of investing is psychological; therefore exhibiting patience at entry points and having patience

while an investment position develops are integral parts to successful investing. Moreso, investing in stocks with

good and consistent dividend pay-out history and being rewarded with numerous dividend while you wait is a plus in

this wise. Therefore, the key to success is to find the right company at the right price. in this case, the right

companies are those that have a strong underlying business; have a history of paying their owners well; and trade

at a decent price when compared to their underlying worth.