Find out why you should work on your emotionality and become a patient investor to increase your earning potential
“Patience is the virtue of the strong.” We are using this words on numerous occasions in our daily life and mostly it corresponds to the reality of the results, on the other hand, “Haste is Waste” . Do you also think that it corresponds to reality?
Although each of us has our beliefs, the truth is that agreeing with what we have just said is not that difficult. However, maintaining patience in critical moments is a skill that not everyone possesses and is useful in all life situations, even those concerning investment choices .
In this regard, today we want to dedicate this new blog article to a very interesting topic for investors, explaining why it is important to adopt a patient attitude when investing without getting impulsive as soon as a negative event occurs.
Time horizon management: the difference between a speculator and an investor
Being patient for an investor means first of all knowing how to strategically manage the time horizon of the chosen investment. Whether you have decided to invest in the stock market or in crowdfunding, you must be aware that time management assumes strategic importance for the success of your investments .
For those who are not used to investing their savings, emotionality and impulsiveness can play tricks and lead to very disappointing results.
In particular, bad or good management of the time horizon of your investments defines what is the distinction between a speculator and an investor . Below we explain more clearly what we are talking about.
The speculator , by nature, is an individual who wants to achieve a lot with minimum effort and with regard to his “aspiration” you can easily understand how at the basis of his investment choices there are zero strategies .
Often, a speculator, you recognize him by the fact that he always acts on a short time horizon . Indeed, he moves with impulsiveness when price falls occur, since he has not well understood the dynamic nature of the market.
The speculator, in short, sells and buys out of fear.
The aware investor instead, he acts with discipline, constancy and, in fact, patience. Time is not a problem or a negligible element for him, on the contrary, it plays a predominant strategic role, which if managed well allows you to obtain higher returns.
The reasons why the conscious investor makes time his best ally are essentially two:
1. to have understood that downward movements within the markets are inevitable and that one must learn to manage them from an emotional point of view;
2. understand how the compound interest mechanism works to increase earnings .
Let’s say you wanted to invest in our real estate lending crowdfunding platform. To take advantage of the interest capitalization advantage you will have to invest the gains obtained from a first investment (consisting of loaned capital and interest) in other future opportunities, favoring an exponential growth of your earnings.
4 tips to train you for patience in investments
• The recurring investment.
Making the investment a constant activity over time has numerous benefits. Among these there is certainly that of increasing the awareness of your investment choices and therefore making you more patient towards situations that at first glance could lead you erroneously to abandon everything.
In practice, it is a question of making the investment activity automatic , turning it into a habit . The advantage? Your emotional state will be more predisposed to rationally deal with the developments of your investments.
• To be informed.
When you inform yourself in detail on a topic, you feel calmer, because mastering a topic increases your ability to deal with possible negative consequences. For this reason, a better understanding of your investment will help you mitigate the emotional reactions that can hinder positive performance and cause you to lose.
• Portfolio diversification.
One way to train patience is to diversify your portfolio . By focusing on multiple strategies and / or investment instruments, you will be able to maintain a long-term time horizon with greater discipline, without being influenced by current trends and continue expeditiously exclusively according to your financial objectives.
• The definition of clear and precise financial objectives.
When you clearly establish your investment goal, you are already halfway there. To enhance your level of patience you need clear and measurable objectives to support your investments , which in the strategic phase will help you keep the focus on the real goals you want to achieve.
How and why to earn in the medium term with Ethical Return?
If you are looking for new investments in the medium to long term, real estate crowdfunding could be for you. Our lending crowdfunding platform was born in April 2019 and in more than a year has achieved significant growth in terms of capital raised and subscriptions to the platform .
This is due to numerous factors, primarily the reliability of our work.
If a lender has invested in a real estate opportunity on Ethical Return , he will be constantly updated on the development of the real estate transaction in which he participated . This is for a very simple reason: we want to make the lenders of our community involved and aware of their investment choices.
If you decide to become an Ethical Return lender and be part of our large community, know that your loans are low risk , as you can diversify your investments by participating in multiple real estate opportunities at the same time, choosing the ones that best suit your needs .
Last but not least, because we care about our lenders’ savings, we ensure that the opportunities offered on our platform are financially sustainable and that every real estate transaction can guarantee good returns for participants.