Inaction IS action
why doing nothing can be the hardest thing to do
Patience is a virtue that's hard to come by. I often find myself under the emotional desire or stress to take action so that my portfolio will outperform. Is this greed? It's definitely impatience. I desire to look at my portfolio and see it hit the lofty targets I've set for it. What can I do to improve its performance? What actions can I take? Which stock should I buy? What trades should I execute?
At times like these it's important to remember that inaction is sometimes the best action. Patience is a virtue, and virtues are indeed hard to come by. Why do I think inaction is the right action these days?
When I open my portfolio and look at the stocks and positions, I'm generally happy with what I see.
I own companies that I believe in, with good management, and I think they will outperform the market.
I'm happy with my position sizing; aside from Spotify, most of my positions are decently sized positions. Some are beginning to reach 'core holding', others are starting positions. I haven't built out a ~10% position in any single company, because my investment style and time horizon hasn't merited it yet. Discipline in timing here is important. I've learned in the past that I need to be better at scaling in to a company: both in terms of price and time. My positions reflect a good mix between being invested and yet having the time and cash to increase positions sizes when the plan merits.
All of my positions leave me ample room to buy on significant dips. Cash is my second largest position, giving me a substantial cushion should the market fall—an anti-fragile factor in my portfolio that I appreciate.
Overall, I'm pleased, and in fact I've been outperforming this year: my portfolio is up 15.85% YTD vs 9.9% for the QQQ. Which is why patience now is a virtue.
I've positioned well, the only thing left to do is wait for my companies to deliver their results. Hopefully, they'll perform well or, if they disappoint, perhaps create better long-term buying opportunities. At the moment, I don't see a decisive action I can take that will cause me to outperform. The only action in fact, is to 'take' the action of patience and letting things play out. I believe I'm well-positioned for both good upside and manageable downside, should it occur.
It's unfortunate that patience is so hard to come by.