In an article by Karl Leinberger of Coronation, he discusses the value of long term investing and conditioning our minds to resist temptation. The article is available under ‘fund manager comments’ on our website. For your convenience, we have summarised it below:
Long term investing
– In an industry with many different investment philosophies, slicing and dicing between value and growth, we consider the defining feature of our investment philosophy to be our long time horizon.
– The ability to delay instant gratification is a quality absolutely essential for successful long term investing – an ability which is against human instinct.
– The theory of investing is easy, putting it into practice in the real world is a different ball game.
– Investors that have the luxury of a long time horizon have an enormous opportunity to profit from the mispricing that occurs when an asset’s near-term outlook diverges from its long-term prospects.
– Despite this long term philosophy, there is much short-term performance pressure: performance in the unit trust industry is usually rated according to the preceding 12 months.
– We don’t believe you can give yourself much chance of getting it right if you don’t cut out the short term noise and take the long-term view.
