Do Less

 Have you encountered these very animated and loud conversations about investing around the coffee machine? Often you will come across some colleagues who rattle off the many investment decisions that they have taken and how they are making big money?

 

My experience suggests that investment success is inversely proportional to the number of investment decisions that one takes over a period of time. The more transactions or decisions, the less the success. The more decisions taken also means a higher likelihood of bad decisions. This behaviour is often driven by the news of the day or the need to be constantly on top of the latest fad. This constant action does not lead to better success albeit it more often leads to poor success. Try to take a few good decisions based on your conviction and then let your investments work their way up. The magic of compounding is real.  It works.

 

Taking a few good decisions and then waiting for the magic of compounding to unfold will almost always give a better return on your investments compared to constant buying and selling.