We should remember, when we give 3 years to our portfolio, we will be competing with many competitors. However, if we give 7 years to our portfolio, we will have less competitors and as we stretch our time, the number of competitors reduce and the compounding plays its better role
Chinese Bamboo tree don't grow taller for first 5 years, it takes its own time to show progress. After 5 years, it can grow 8 feet in 6 weeks. This is the J curve which takes time. So, we can define as J Curve is directly proportional to Time
The concept is very simple but not easy. Focusing on small step consistently over time builds wealth
Delayed gratification was tested with an experiment widely known as Sanford marshmallow experiment, kids with the age group of 4 to 5 were chosen and they were told, they will be given 1 marshmallow if they want it now or they can wait for 15 minutes to get as 2. It was noticed that, kids who had the patience and gained the delayed gratification has achievement much more benefits in life compared to the one who showed interest on instant gratification. This was observed for over 40 years by their actions
To avoid panic and to avoid stress on the portfolio movements, we should know that investing small over the longer period of time will help us to have the Delayed Gratification. This delayed gratification make time to work in our favor and which in turn make the compounding work better for us
This concept is very simple but not easy.
Have a Great Day
B G Nareshkumar
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