I’m married.Marriage is about commitment and patience.Marriage is not for the impulsive or the fickle.There are going to be ups and downs, good times and bad times.Through all of that, I firmly believe marriage is ‘worth it’ a million times over.

What does marriage have to do with long-term investing?

Keep reading to see why commitment matters in marriage, and in your investment portfolio.

In marriage, you get to build the deepest relationship of your life.All the little (and big) nice things you do for someone else are added to the ‘love bank’.These little deposits grow over time.You get the interest on your investment through reciprocity; the person you love most in the world doing little (and big) nice things for you.

The draw of marriage is building a deeper, longer bond with one person than you will with anyone else.That is very special.

Society knows marriage is special.That’s why getting divorced is a difficult process.You can’t just tell your spouse ‘we are divorced’ and be done with it.When you give your life-long (and legal) commitment to someone, you can’t just walk out the door with no strings attached.

What if we approached owning our stocks with the same conviction? That’s what long-term investing is about.

“People have a way of looking at me strangely when I tell them that long-term investing isn’t about having a great system, or a superior analytic intellect, or better access to information, or even the best advice money can buy.Long-term investing is about character, about depth of vision and the cultivation of patience, about who you are and who you’ve made yourself to be”

The Single Best Investment, page 149

Table of Contents

Long-Term Investing Definition

What is long-term investing?I define it as follows:

Long-term investing is the process of buying and holding investment securities you believe will compound investor wealth indefinitely into the future.

Why You Need to Become a Long-Term Investor

There are 3 good reasons to become a long-term investor:

Every time you buy or sell a stock you incur transaction costs.Buying and holding indefinitely reduces fees.In taxable accounts, this is especially important.When you hold a stock that has capital gains you are in effect allowing the portion of those gains you owe to the government to continue to compound in your investment.This has a powerful effect on your investment over time.

Time is money.The purpose of life is not to manage your investments…I don’t know what the ultimate purpose is, but I can say from experience it is not analyzing potential investments.Long-term investing requires less of your time.Once you buy a high quality stock you believe will maintain its competitive advantage indefinitely, your work is done.All you have to do is periodically (quarterly would be plenty) check in on the company to make sure it is performing reasonably well.You don’t have to find other quality investments tomorrow, next week, or even next year…The money you’ve invested is safely compounding away.