Do you believe I said it – protect your money by doing nothing.
Yes, it is true. I mean what I say.
There are two parts to this…
Investing
First, it relates to investing. From the Mark Tier’s book, “The Winning Investment Habits of Warren Buffett and George Soros”, the 10th habit advises us to have infinite patience when it comes to investing.
“When the Master Investor cannot find an investment that meets his criteria, he has the patience to wait indefinitely until he finds one that does. The Losing Investor feels he needs to be doing something in the market at all times.”
Warren Buffett – “The trick is, when there’s nothing to do, do nothing.”
Investors have the impulse to always want to stay involved in the market even when there is no clear opportunity to take advantage of.
Actually, I do not see much problem for fundamental investors but rather, very crucial for traders. Traders are active in the market due to their style of investing – they get in and out of the market frequently. There are times when the market direction are not clear and some time is needed for the market to make up its mind where it wants to go. In this ‘whipsaw’ period, traders must have the discipline to hold their investment and if not, they will have to take many losses. Hence, by doing nothing during this period is the best way to keep your capital intact. Action only when the market gives a hint.
Shopping
Do nothing the next time you go shopping. Simply by not buying anything protects your money from escaping from your bank account. It is extremely necessary if you have a tendency to make impulsive buys.
You may also like:
- Warren Buffett – "Risk comes from not knowing what you're doing."
- Warren Buffett – "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
- The Winning Investment Habits of Warren Buffett & George Soros by Mark Tier
- Warren Buffett – "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
- The Dip and Investing
- Warren Buffett – "Our method is very simple…"
- Warren Buffett – “I’d be a bum on the street with a tin cup if the markets were always efficient.”
- The Warren Buffett Way – Robert Hagstrom
Discover the Secrets of Singapore Trading Gurus!
Interviews with Singapore stocks, forex, futures and options traders and trainers! This book is written for you:
- learn how professionals trade
- discover their strategies, money management and approach to the markets
- understand their stories and motivation behind trading
- know your trainers before attending their courses
