Investing

My name‿ is Carl. I have‿ invested‿ a small‿ amount‿ every month for ten years,│ an(d) the mos(t) useful thing‿ I have learned‿ is that the behaviour‿ of the investor matters more than the quality of the investment.

The mechanics‿ are simple. I diversify so that one failure‿ is not fatal,│ I hold‿ a horizon‿ of‿ at leas(t) ten years,│ and‿ I accep(t) volatility as the price‿ of‿ a return. Compound‿ interest‿ is the only genuine miracle‿ in personal finance,│ an(d) time‿ is what makes‿ it work;│ a month‿ of contributions‿ at twenty-five‿ is worth more than‿ a year‿ at fifty^fif-dy. What‿ is not simple‿ is the psychology. Twice‿ I sol(d) during‿ a fall,│ an(d) both times‿ I was wrong within six months. Speculation‿ is differen(t) from‿ investing precisely│ because‿ it requires you to be right‿ about the timing,│ an(d) nobody is.

Inflation‿ is why I do not keep my capital‿ in cash. With prices rising‿ eight percent‿ and‿ a savings‿ accoun(t) paying two,│ the money in the bank‿ is losing value,│ and‿ it‿ is losing‿ it quietly. My adviser tol(d) me to invest‿ only what‿ I will not need‿ in five years,│ and‿ I have followed that rule with more discipline than‿ any other. Liquidity matters,│ but‿ a portfolio should never be so liquid│ that‿ it‿ evaporates‿ at the firs(t) shock.