RESPECT YOUR MOST PRECIOUS ASSET: TIME | ||||||||||||
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The scorekeeping equation looks roughly like this:
In plain English, that means that time has more muscle in the score because it is a power function. Gains, either from price change or dividends, are only linear, or simple, elements. And because 1/time is an inverse, the larger time is, the less muscle it imparts. We all are given lifetimes for free, but none of us knows for sure just how long we have. When time is spent, it is gone, there is no way to get it back. Replacements can't be bought. Your best investment scores will come from capital commitments that
take shorter time periods
The 8th wonder of the world is compound interest, or mathematical compounding.
Buy-and-hold (and forget) strategies with objectives beyond forecast-capable limits, or strategies with no targets, are not investing; they are speculation, just wishful thinking |