Why is DISCIPLINE an undying key principle in investing? Here’s the answer to that question!

Wednesday: The Independent Investor FROM THE DESK OF MILES EVERSON: Hello! We’re excited to share with you essential investment insight in today’s “The Independent Investor.” Every Wednesday, we publish articles centering on investment tips and strategies that will help you achieve true financial freedom. Today in particular, we’ll focus on one of the foundations of good investing. Are you ready? Keep reading below to know more! CEO, MBO Partners Chairman of the Advisory Board, The I Institute

Why is DISCIPLINE an undying key principle in investing? Here’s the answer to that question! Have you ever wondered how some businesses continue to prosper and how some investors continue to have strong portfolios even in the midst of an unstable economy and fluctuating market? The answer lies in DISCIPLINE. Generally speaking, whether personally or organizationally, being disciplined is a key attribute that everyone should possess. This allows a person and an organization to carefully plan their goals while avoiding possible setbacks and distractions. Let’s see how these same sentiments can be applied in investing… According to Professor Joel Litman, Chairman and CEO of Valens Research and Chief Investment Strategist of Altimetry Financial Research, being disciplined isn’t new in the world of investing. Companies often highlight the importance of well-disciplined investment tactics, especially when there are hints of a potential decline. In fact, in the 1990s, business experts Michael Treacy and Fred Wiersema released their bestselling book titled, “The Discipline of Market Leaders.” Here, Treacy and Wiersema discussed different competitive business strategies, disciplines, and principles. The book mostly captivated company executives and managers. However, Professor Litman says discipline shouldn’t just be observed by top corporate executives and management teams; it should also be seen as an asset that anyone in the business world must have. Through Actions, Not Words One prominent advice given to investors is to buy low and sell high. However, Professor Litman says it’s still a surprise just how many investors lack the discipline to practice this concept. More often than not, investors are swayed by mainstream financial markets. As a result, these individuals panic and let the market hype dictate their financial decisions, without carefully planning and considering how these decisions impact their long-term goals. Allow us to share with you a concrete example… In late-March 2020, there was an uproar about how that month was one of the worst months ever in the market, and a great number of investors made a run for it. Even those who have been spoonfed of the “buy low and sell high” tactic got cold feet. … but there were still some who stood firm in their investment strategies and decisions. In other words, these investors were disciplined enough to deter from the market hype. Because of that, they were able to secure substantial returns. Based on this example, can we say the stock market is the root of the problem? NO. Ultimately, the main issue lies not with the stock market, but with the impulsiveness of investors. While it is true that the market is expected to stay volatile and unpredictable at present, investors have a choice whether to panic or not based on the current situation. So, what can we learn here? One of the core foundations of good investing is discipline. This prevents investors from making rash decisions that can lead to a backlash in their own portfolios. It’s no surprise that the uncertainties in the economy, fluctuations in the market, and bandwagon investments can sway lots of people into making bad financial decisions that will affect them in the long run. That’s why as an investor, you should be disciplined enough to not be blinded by short-term performances. Instead, focus on careful planning and long-term tactics for better stability. Moreover, being a disciplined investor means taking advantage of the current economy’s state, as well as knowing what your priorities are. Practice discipline today and start your journey towards true financial freedom by making wise financial decisions! — In line with MBO Partners' continuous dedication to supporting you and your business, we want to notify you about an opportunity to access potential tax credits of up to USD 32,200. The American Rescue Plan Act of 2021 provides specific provisions for self-employed individuals, known as the Self Employed Tax Credit (SETC), for which nearly everyone with Schedule C income qualifies. This acknowledges the unique challenges faced by those who work independently especially during times of illness, caregiving responsibilities, quarantine, and other circumstances. There are two criteria you must meet to qualify for receiving the tax credit of up to USD 32,200. Click here to see how you can obtain the SETC to know more about this. Act NOW! This credit will expire on April 15, 2024, so we encourage you to submit early to see if your business qualifies. Also, if you know others who may qualify for the SETC, you may share these details with them. Hope you’ve found this week’s insights interesting and helpful.     The U.S. has run at a deficit for over a decade. Since the end of 2012, the country’s total public debt has exceeded its gross domestic product (GDP). As of Q2 2023, the U.S.’ debt is 20% greater than its GDP. Learn more about the missing key detail in the debt-ceiling debate in next week’s article!