Consistency determines the outcome of our lives.

Consistency is Key

Consistency is everything….

Consistent performance is the most important aspect of investing….period. This isn’t open for discussion… at least not on planet Earth. There isn’t one investor who’s reached billionaire status who hasn’t thought about the performance of their stocks, businesses, or property decades out. It’s what got them to where they are. Limiting risk, while meeting a consistent level of adequate performance is what creates bottom up millionaires. If you get too greedy, you’re almost guaranteed to lose big eventually. Too conservative and you’ll barely be outpacing inflation.

Warren Buffet loves consistency….

Warren Buffet is the most successful investor on the planet. Do you know what his minimum benchmark is for annual ROI? 15%. Not 6%. Not 200%. Just 15%.  He’s in it for the long-haul, and when you can double your money every 3 to 5 years it doesn’t take that long to grow your wealth substantially. Not only does Warren look for consistency in hist portfolio, but in the actual business operations of the companies he buys.  Fundamentals that show steady growth year to year, and a competitive advantage likely to be around for a very long time.  In contrast, he’s been known to avoid tech stocks simply because he didn’t view them as a consistent investment that he could understand as time went on.

Focus on getting on base.  Not hitting home runs…

I once heard an option trader put it in these terms. He compared the speculator to somebody who only swung for home runs. He wouldn’t bother with perfectly decent pitches. He’d wait for what seemed to be the home run pitch and then swing hard and violently to hit that home run. The problem was that the batter wasn’t as good as he thought he was, and just wound up striking out more than they hit home runs.

But the savvy investor wouldn’t go after the home runs. He wanted the pitches that would most readily get him on to the base. You’re far more likely to win getting your bases loaded than you are trying to hit a home run every time. If you and your teammates can manage that, you’re going to have a lot more runs coming through the pipeline.

This is my whole point. Stop trying to fulfill your ego by hitting a home run every single time. Instead, be the guy who will go for the easiest opportunity to get on base. Pick the low apples so to speak. The riches will come. I stand by that. But you have to have a little discipline, a little patience, and a little respect for what it takes to be successful at investing.

 

If you’re having trouble figuring out how to get started, or how to see some consistency in your portfolio, we can help.  Check us out!

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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