Don’t Invest Without Discipline

A well-thought-out financial plan is necessary for successful investing, but even the greatest plan won’t bear fruit if an investor doesn’t have the discipline required to stay the course, rebalancing and tax-loss-harvesting as needed.

Unfortunately, even thorough and intelligent plans will sometimes end up in the trash heap because investors lose heart when their strategy appears to not be working. One of the keys to disciplined investing is acquiring a strong understanding of sound investment principles.

Investors who do so won’t make the mistake I refer to as confusing strategy with outcome. In a world where there are no clear crystal balls—just uncertainty—a strategy is actually either right or wrong even before we know the outcome.

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