Author Ryan Holiday: How 'stillness' can help you become a better investor


Staying focused on your investment goals while ignoring the ups and downs of the market isn't easy. But developing a sense of "stillness" may help you do it, says author Ryan Holiday.

Holiday's new book, "Stillness Is the Key," highlights how numerous historical figures — including JFK, Johnny Cash, and Leonardo da Vinci — used a strategic sense of patience, among other things, to achieve their goals.

Being disciplined, even-keeled, and less emotional about your money can help with investing, too. "We know that the best investment strategy is long term. It's indifferent to the day-to-day fluctuations of the market. It's not emotional. It's logical. It's value-based," Holiday tells Grow.

The most dangerous aspect of investing, he says, is that investors "get way too excited when things are good. This is where bubbles and irrational exuberance comes from."

What is a bubble, and why do they pop?

One role model in investing stillness: Legendary investor Warren Buffett, who has called the stock market "a device for transferring money from the impatient to the patient."

Buffett "has to be really patient, which requires stillness," Holiday says. "It requires him to see things that other people don't see. It requires him to be wrong for extended periods of time, until he's proven right."

Developing a sense of stillness and discipline like Buffett's takes practice. Here are two ways you can strengthen this attribute as an investor:

Take emotion out of investment decisions

Feelings, both good and bad, can cause investors to make rash decisions. The goal is "not being jerked around by your emotions," Holiday says, and "having some semblance of self-control."

In practice, this means that you don't panic if the markets start to fall — and you don't get giddy if they continue to climb. You try to keep your head down and stick to your plan, no matter what's going on in the news.

We know that the best investment strategy is long term: It's indifferent to the day-to-day fluctuations of the market. It's not emotional. It's logical.
Ryan Holiday
Author, 'Stillness Is the Key'

Putting your finances on autopilot can help you take the emotion out of your investing decisions. Setting up recurring contributions to your investment or retirement accounts can keep you consistent and ensure that you're benefiting from dollar-cost averaging, too.

You can also work on building up your emergency fund and even try writing yourself a motivation letter to help you keep a steady emotional state when the markets get bumpy.

Limit how frequently you monitor your portfolio

With markets moving due to concerns about a possible recession, news of political impeachments, and trade wars, it's easy to get overwhelmed. For that reason, some investors may find it useful to tune out, at least to a degree. You will still want to be mindful of what's happening with your money, but you could try only checking in once or twice per quarter to strike a balance.

Stick to your predetermined plan to help you stay on track, which can reduce the chances that you'll make a bad decision. "Let go of the reins a little bit," he says. Giving yourself a little distance, in that respect, may allow your portfolio room to grow and help you make sharper, more rational decisions that will set you up for the future.

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