You need patience to own equities

There was an interesting quote from Tom Stevenson of the Daily Telegraph:

"Set against the hyperbole of the headline writers, the answer to the question will strike many as inadequate at best, dangerously complacent at worst. But that does not mean it is not correct. The answer, I believe, is to do nothing. The reason inaction is the best course of action is that, in markets as volatile as these, whatever you do will be a piece of blind speculation, not an investment."

This is great advice; however to heed it investors must have patience-which seems to be in short order these days as dispirited investors' expectations are leading them to the wrong conclusions about the sustainability of the market recovery, the positive outlook for most stocks, and the suitability of stocks within an investment portfolio.

Stay the course
In the worst cases, unrelenting changes are continually being made when all that's really called for at this stage of the game is patience. If your portfolio is designed around your risk tolerance and time horizons why would you change it now?

Would you pull the pitcher for walking a batter in the first inning? Would you rip a bulb out of the ground after a week if it hadn't bloomed? Would you stop exercising if you didn't drop 15 pounds after your first day at the gym?
We shouldn't have to continue with these oh-so-clever metaphors to make the point that patience is imperative to realizing a substantial result. And it's no different with stocks.

Impatience is an understandable byproduct of the information age. Advertising messages tell us, "you need to have it now"," faster is better", and "why wait?"

The Internet was supposed to bring instantaneous access to market information and could thereby be the key to unlimited wealth. But it has led many investors to impatience and excessive trading, rash decision-making, market timing, and undue stress.

The market will always recover, as of course will the economy, but full realization of significant returns is down the road. We all know they will recover-what we don't know is when.

We have been told again and again that to be a successful investor you need to be disciplined to buy low and sell high. To actually follow this rule, you must be willing not to follow the crowd.