Discipline: Your secret weapon
The photograph above this blog article is of my Springer Spaniel, Bear. This shot was taken last weekend at “dog boarding school” where he is spending 6 weeks in training. Here he will be fashioned into a dog capable of working in the field. What he is really being taught is discipline – without discipline he becomes a liability and his positive impact on a day’s hunting would swiftly become a negative.
It is not just dogs that need discipline, investors need it in spades too. Benjamin Graham wrote in The Intelligent Investor that “the investor’s chief problem – and even his worst enemy – is likely to be himself.” When people follow their natural instincts they often apply faulty reasoning to investing. Some struggle to separate emotion from their investment decisions, falling foul of excessive optimism or becoming unnecessarily fearful. By giving in to such emotions and not having discipline may lead to making poor investment decisions at the worst times.
Having a disciplined investment philosophy and strategy differentiates a sophisticated investor from the average investor. Your strategy and philosophy does not have to be complicated. Warren Buffet’s investment approach could be described as “buy a good business at a good price and hold it forever.” A disciplined strategy helps keep our behavioural biases in check, provides focus and may be more likely to deliver a successful investment experience.
Unfortunately there is no training camp for investors! Nevertheless by finding the right wealth manager you too can create a disciplined plan and focus on actions and outcomes that add value.
By Henry Findlater