To The Moon

I like to believe that I’m an investor rather than a trader, and a long-term one. As long as I’ve performed careful due diligence and bought with strong conviction of a stock’s stable income potential or long-term growth prospects, I would not be bothered by its short-term volatility.

I agree with Warren Buffett that some people are just not emotionally and psychologically fit to own stocks. Volatility is our friend, but you could easily turn it into your enemy if you panicked and lost sleep over every slightest market downturn. Indeed, the stock market is the only place where investors rush for the exit during a sale.

While the ideal holding period for a fundamentally strong company is forever, it pays to regularly monitor one’s investments to ensure that their fundamentals remain intact. I had learnt a few costly lessons with my buy-and-hold mentality by stubbornly holding on to stocks whose fundamentals had degraded over time, and they either never recovered or succumbed to eventual bankruptcy when I suffered steep haircuts upon their liquidations.

Luckily, I’ve hit more gold pots than I made mistakes. The key is identifying and holding companies whose fundamentals remain strong or grow from strength to strength over time. The broad market indices of the largest companies, such as $Vanguard S&P 500 ETF(VOO)$ , are also great long-term investments, as the broad market will outlive any short-term volatility and emerge stronger over time, and the time spent invested in the broad market will generate higher returns than timing or trading the market over time.

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