Why playing the long game is key to investment success

Successful investing comes from applying a long term approach and having the courage to make decisions, says Stuart Wemyss.

Stuart is a qualified chartered accountant, independent financial advisor and author who delivers unbiased advice to investors.

He spoke to KnowHow founder Bushy Martin on the Get Invested podcast about some of the biggest mistakes investors make, such as adopting a short term strategy.

He said his own mistakes early on in life opened his eyes to the need to readjust his focus.

“I was just sort of tripping through life, making some ad hoc decisions, and I didn’t truly understand the fundamentals of what I was doing and really kind of just getting distracted by shiny objects,” Stuart said.

“I certainly wasn’t playing the long game and I certainly didn’t really give a lot of thought to, ‘am I living the life that I truly wanted to live’ or was I just working my arse off and not really producing the results that are actually going to get me to where I wanted to go.”

Today, he educates others on the benefits of delayed gratification and taking the long-term, holistic approach.

“So the last eight years, I’ve really been 100% focussed on the long game. So really thinking about, what am I doing today and how can I have the greatest impact over a 10, 20 or 30 year time period … and I’ve got a very clear vision of what I want out of life and where I want to spend my time,” Stuart said.

“It’s not about the amount you’re investing. It’s just about the discipline to do it regularly, and then the discipline to take a long-term approach … Those small incremental steps towards that longer term goal, that’s what generates significant value.”

However, many will be clouded by emotions, such as fear and greed, in their decision-making.

“I think both of those two emotions are very short sighted, very short term focussed. So it’s people sitting around procrastinating, not actually taking the step, not actually putting their plans into motion and actually investing, you know, the start that stops most people. Or, it’s chasing too high returns, trying to trying to take shortcuts, trying to make some quick profit,” he explained.

“And I think it’s just human nature … It seems very attractive and it is difficult to resist that temptation to do that.

“But I also know that short term profit never drives long term value. And so while that small profit might be good, it never gets you closer to your longer term goal because either you’ve got to think about what’s the next after pay, what’s the next opportunity for me to roll the profit into, or I’m left with making a short term profit, well big deal, it’s probably not going to change your life.”

Stuart acknowledged that taking the long-term view can be painful, which is why so many tend to avoid it. But he urges investors to take the plunge and commit.

“I think we tend to avoid making decisions if it puts us in a more painful process. And I guess the decision not to invest over investing and taking that long term approach means that you haven’t made that decision yet. You haven’t been wrong. You are still ready to make an investment if the greatest opportunity turned up tomorrow,” he said.

“So by delaying making that decision, you’ve delayed the pain of having to make that decision and the pain of having to commit to a 100-mile march. You know, something that might take 20 years to really pay significant dividends. That feels like a massive commitment.

“But I think you then turn on your head and say, ‘well, what’s the outcome of not making the decision?’ I would argue that’s far more painful. And I’d also argue that once you’re into that journey, you start to see the dividends, you start to see it really roll.”

Listen to the full interview here.

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