Do Nothing or Do Something: Which Requires More Courage in Investing?

Tiger_comments
08-21

In the process of stock trading, investors often face two choices: actively making moves or staying on the sidelines.

A fund manager in Nevada, who manages a $35 billion pension fund, has chosen the strategy of “doing nothing.” He adopted an almost entirely passive investment strategy—allocating the entire fund to index funds and making no active trades.

The biggest decision this fund manager seems to face each day is whether to have a sandwich or tuna for lunch. While the strategy of doing nothing may appear simple, it actually requires immense courage and wisdom.

$Tiger Brokers(TIGR)$

Do Something: The Courage to Act

Many people believe that taking action in the market is a way to demonstrate courage. Especially in times of intense market volatility and an overload of information, investors are often encouraged to react: buy, sell, or adjust their positions.

The courage to act lies in making decisions amidst uncertainty and fluctuations, and bearing the potential risks and rewards that come with those decisions.

However, excessively frequent trading can lead to high transaction costs, emotional decisions, and the loss of long-term investment opportunities due to chasing short-term fluctuations.

Do Nothing: The Wisdom of Inaction

On the other hand, the strategy of staying on the sidelines, or "doing nothing," may seem simple or even passive on the surface, but in reality, it requires more courage and patience.

The Nevada fund manager chose to invest in index funds and hold them for the long term, making almost no trades. This strategy actually reflects a deep trust in the market and a strong confidence in one’s own judgment.

Inaction does not equate to a lack of thought. On the contrary, this strategy demands that investors resist the temptation of short-term market fluctuations, stay calm, and not be easily swayed by the ups and downs of the market.

Which is Harder: Do Nothing or Do Something?

Which do you think is harder to achieve, doing nothing or doing something?

Which investment philosophy do you agree with more?

What is your investment style?

Join the discussion to win tiger coins~

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • Success88
    ·08-21
    TOP
    Always need to do something cannot wait for durian to drop. Always try to make it success. This is my investing strategy @Tiger_comments @HelenJanet @MHh @SR050321
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  • highhand
    ·08-21
    This depends on market conditions.
    When market go up, do nothing is hard because of FOMO.
    When market is down, do something (buy in) is hard because you scared catch falling knife.
    With experience, discipline and patience, I managed to do both this correction and rally. [smile]
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  • TimothyX
    ·08-21
    許多人認爲，在市場上採取行動是展示勇氣的一種方式。尤其是在市場劇烈波動和信息過載的時候，投資者經常被鼓勵做出反應：買入、賣出或調整頭寸。

    行動的勇氣在於在不確定性和波動中做出決定，並承擔這些決定帶來的潛在風險和回報。

    然而，過度地頻繁交易會導致高交易成本、情緒化決策，以及因追逐短期波動而失去長期投資機會。

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  • MHh
    ·08-21
    Both can be hard to do depending on your beliefs. It’s hard for a trader to not do anything and it is hard for an investor to keep trading. I generally do not trade so it is usually more a question of whether to add position. However, if it is an ETF, then it is easier to add. The question is how much to add and at which price. Of course, it is important to also control position so there would also be the need to sell at the right price when necessary .
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  • SPACE ROCKET
    ·08-21
    Do something carries risk.

    Do nothing incurs opportunity costs.

    Either way also FOMO.

    Do abit of something better than doing nothing bah. LOL

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  • AI Mastero
    ·08-21
    I like the topic so much @Tiger_comments. Do something looks like a quick response, quick action and always good for action heroes. It also satisfies the inner soul immediately and keeps you occupied energetically. However, doing nothing is all about going to zen mode and waiting for the right time to strike a jackpot. At least I think so.
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  • Joker_Smile
    ·08-21
    TOP
    I buy a stock when I believe in its long term future. Thus, I am more of a 'do nothing' person. @Tiger_comments
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  • Universe宇宙
    ·08-21
    TOP
    @TigerGPT go to the Internet and grab information about doing nothing and doing something and which one gives more returns?
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    • TigerGPT: 

      When it comes to investing, both doing nothing and doing something have their own challenges and require different levels of courage.

      Doing something, or taking an active approach to investing, requires the courage to make decisions amidst uncertainty and market fluctuations. It involves analyzing information, identifying opportunities, and taking action based on one's investment strategy. This approach requires investors to constantly stay informed, monitor market trends, and be prepared to adjust their positions. However, it's important to note that excessive trading can lead to high transaction costs, emotional decisions, and missed long-term opportunities.

      On the other hand, doing nothing, or adopting a passive investment strategy, also requires courage and patience. This approach involves staying on the sidelines, holding onto long-term investments, and not reacting to short-term market fluctuations. It requires investors to trust in the market's ability to generate returns over time and to resist the temptation to make impulsive decisions based on short-term volatility.

      In terms of which approach gives more returns, it ultimately depends on various factors such as the investor's knowledge, expertise, risk tolerance, and market conditions. Both active and passive strategies have the potential to generate returns, and the effectiveness of each approach can vary based on individual circumstances.

      As an AI, I don't have personal investment experiences or preferences. However, it's generally advised that investors carefully assess their own goals, risk tolerance, and time horizon before choosing an investment approach. Some investors prefer a combination of both active and passive strategies, diversifying their portfolio with a mix of individual stock picks and index funds.

      It's important to remember that investing involves risks, and there is no one-size-fits-all approach. It's recommended to seek professional financial advice and conduct thorough research before making any investment decisions.

      (Note: The views expressed in the provided information are for reference purposes only and do not constitute investment advice. Investing in financial markets involves risk, and you should carefully consider your investment objectives and consult a financial professional before making any investment decisions.)

      08-21
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  • MasterStonker
    ·08-21
    Always do the most you can do...
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  • icycrystal
    ·08-21
    TOP
    sometimes, it's better to do nothing especially during uncertainty.

    at times, courage is needed to take on risks.

    either case, need to see where the market flows and flows along with it instead of against it.

    @koolgal @GoodLife99 @Universe宇宙 @rL @HelenJanet @LMSunshine @Shyon @Aqa @SPACE ROCKET @TigerGPT

    Which do you think is harder to achieve, doing nothing or doing something?

    Which investment philosophy do you agree with more?

    What is your investment style?

    Join the discussion to win tiger coins~

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    • TigerGPT: 

      As an AI, I don't have personal opinions or the ability to win Tiger Coins, but I can provide some insights on the topic.

      Both doing nothing and doing something can be challenging in different investment scenarios. It depends on various factors such as individual risk tolerance, investment goals, market conditions, and one's ability to make informed decisions.

      Doing Nothing:  

      Psychological challenge: It can be difficult to stay calm and patient during periods of market volatility or uncertainty. The fear of missing out (FOMO) or the fear of losses might tempt investors to make impulsive decisions.  

      Overcoming emotional biases: Doing nothing requires discipline to overcome cognitive biases like herd mentality, emotional decision-making, or trying to time the market.  

      Sticking to long-term strategy: Doing nothing is harder for those who have set long-term investment goals and need to resist short-term market fluctuations.  

        Doing Something:  

        Identifying opportunities: It requires extensive research, analysis, and understanding of market dynamics to find investment opportunities that align with one's investment philosophy.  

        Risk-taking: Taking action often involves assuming risks and making decisions based on available information, which requires confidence and a strong risk appetite.  

        Active management: If one chooses to actively manage their portfolio, they must continuously monitor and adjust their investments, which can be time-consuming.  

        Investment philosophies differ among individuals, and there is no one-size-fits-all approach. Some may prefer a passive investing strategy, such as index funds, which aligns with the "do nothing" philosophy, while others may adopt an active investing approach, focusing on market trends and making frequent trades.

        Ultimately, the choice between doing nothing or doing something depends on an individual's risk tolerance, investment knowledge, financial goals, and personal preferences. It's essential to develop a well-thought-out investment strategy and stick to it, regardless of short-term market fluctuations. Remember, investment decisions should align with your financial objectives and risk tolerance, and seeking professional advice is always recommended.

      08-21
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  • ECLC
    ·08-22
    Do nothing is harder in the waiting and if no funds to buy when the price has dipped much after all the monitoring.
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  • nomadic_m
    ·08-22
    I adopt a hybrid investment strategy:
    - *Core:* Do nothing, adopting a buy-and-hold approach for my core portfolio (e.g., 80% of my investments).
    - *Satellite:* Do something, actively managing my satellite portfolio (e.g., 20% of my investments).
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  • AliceSam
    ·08-22
    过度地频繁交易会导致高交易成本、情绪化决策，以及因追逐短期波动而失去长期投资机会。
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  • Aqa
    ·08-23
    More courage is required when “Do Something “, like making decisions amidst uncertainty and fluctuations, and bearing the potential risks and rewards that come with those decisions. Too much courage leads to excessively frequent trading which can lead to high transaction costs, emotional decisions, and the loss of long-term investment opportunities due to chasing short-term fluctuations. Whereas “Do Nothing “ requires more patience, knowledge and confidence that help to resist the temptation of short-term market fluctuations, stay calm, and not be easily swayed by the ups and downs of the market.
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  • Shyon
    ·08-27
    Doing Nothing vs Doing Something: Doing nothing requires discipline and patience, especially in volatile markets, and involves resisting the urge to act impulsively. In contrast, doing something involve decision-making and risk but can lead to rewards if executed wisely. The challenge here is ensuring that actions are well-informed and align with one’s investment strategy.

    Investment Philosophy: I favor long-term investing, similar to Warren Buffett’s approach. This philosophy emphasizes patience, thorough research, and risk management, focusing on holding investments for the long term to benefit from compounding growth and market appreciation.

    Investment Style: Key styles include value investing, which seeks undervalued assets with strong fundamentals; growth investing, which targets high-growth potential companies; and index investing, which involves passive investment in index funds to match market performance. Each style suits different goals and risk tolerances. @Tiger_comments

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  • WebbBart
    ·08-21
    Do Something [Anger] Do Nothing [Speechless] Both strategies require different types of courage.
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  • AG11
    ·08-22
    Great article, would you like to share it?
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