THE IMPATIENT INVESTOR- 'Part Three of the Personal Finance for Starters Series'

New Delhi: If you are the type of investor who likes their trades fast and returns faster, then this article is a good read for you. While speed is thrilling, it isn't necessarily always a good thing, especially when it can jeopardize anything that involves your hard-earned money.

As the age-old saying goes, patience is not the ability to wait, but to keep a good attitude while waiting.

It is patience, or lack thereof, that makes or breaks one as a good investor. A patient person has all the virtues required to become a successful investor- a long-term strategy, the ability to wait, a resilient attitude and the legroom to experiment. On the other hand, an impatient investor runs at first sight of panic, and is not able to stay put in any investment long enough to reap its gains.

THE COST OF IMPATIENCE

An impatient investor is someone who likes their trades fast and results faster, essentially making him more of a trader than an investor. While there is nothing wrong with wanting quick returns, haste often leads to mistakes. Impatience, more often than not, leads to unnecessary panic transactions which lead to higher transaction costs, hasty decision making which may lead to regrettable outcomes, and lack of diversification. Quicker returns always come with the drawback of having to bear a higher level of risk.

There is a thin line between being a quick-calculative investor and a reckless one, and boy, do people toe that line!

Investments made simply out of greed can dissolve one's money faster than the blink of an eye.

BUT I WANT WHAT I WANT

If you are an investor who is ready to take some amount of risk in expectations of higher returns, then there are investment avenues for you, where the chances of you losing money are significantly lower.

THE GUIDING VOICE: HERE'S WHAT EXPERTS SAY

P V Subramanyam, CEO of Subramoney.com shared his expert input on the thrill of investing fast. He said, "If you want to make a guaranteed return in the short term, then you would have to know that the company is rock-solid, that it'll give foolproof returns. Now the catch is, you will only know this in retrospect, for which you'll have to wait around longer than you plan to." He added that it is very rare that bigger profit and longer lock-ins do not go hand-in-hand.

Most importantly, he drew out the difference between a trader and an investor. "A trader thinks about short-term movements and has a low-margin stop loss compared to an investor, whose vision lies in the longer term, and tends to have a deeper stop loss." He said that one can only be a good investor when they learn from their mistakes, but for that they'd have to be invested in a stock long enough to recognize their mistake to begin with.

"If indeed there existed a stock that could give you 10-15% returns in the blink of your eye, don't you think everyone would be owning a part of it?" he reasoned. He added that index stocks can never go wrong in terms of an assured return, but again, you'd just have to wait around to reap those benefits.

He recommended a few stocks he thinks are solid investments, such as Tata Steel, ICICI Bank, Reliance Industries, while his sectoral bets revolve around the steel, metals and oil sector.

"Only get into equities if you are indulging in goal-based investments" he said. If the investment is not driven by a goal and rather by greed, then it simmers down to what a layman would call betting.

He advised following the methods of reputed fund managers such as Prashant Jain, Sankaran Naren, Roshi Jain, and others who have been in the field for years.

When asked about making quick bucks in digital assets such as cryptocurrency, he said, "Crypto is not what crypto does; crypto is what you do. It is a highly volatile security, and your chances of generating a profit from crypto purely depend on what you end up doing with your crypto holding, the currency you hold, etc." He continued by saying that cryptos are highly risky and the holder requires a lot of patience to actually gain something from them, which is why cryptos are not suitable for a fast investor.

He advised that it's best to navigate a little slowly around your investments, and develop some patience in order to be able to potentially develop some profits out of your investments.