Meditations on Long-term Investing

The idea that it’s easy to stay invested over time through ups and downs is about as realistic as the idea that meditation creates a blank mind.

Meditation isn’t about stopping thoughts, ask anyone who practices. 

A Buddhist monk with decades of practice will experience thoughts of fear, doubt, or questions about why their mind still wanders. The mind doesn’t go quiet just because you’ve been sitting on cushion for thirty years. Similarly, an investor with a positive outlook will surely have periods of doubt to navigate along the way.

"Our mindfulness practice is not about vanquishing our thoughts. It's about becoming aware of the process of thinking so that we are not in a trance—lost inside our thoughts."[i]

Meditation and long-term investing are often misunderstood because of how they appear to onlookers. The external stillness is not the absence of thoughts, it’s the ability to allow the thoughts to be noticed, then released. A Buddhist monk’s mind is not blank; what they have mastered is the ability observe thoughts without judgments and return to an anchor, like breathing.

“You can't stop the waves, but you can learn to surf.”[ii] Jon Kabat-Zinn

It’s not the thoughts that change per se, but the relationship with them can evolve over time. You can’t make noise disappear but with practice you can learn that noise is often distraction. There are plenty of pieces written and studies done about how staying invested has the ability to greatly impact your long-term results. These pieces may mention staying invested through downturns, but they often use data to show why, without acknowledging the waves of thought you must surf to do so. 

There are no mythical investors who never have doubts, or at least no successful ones you’ve heard about. There are probably plenty who went broke. Staying invested throughout periods of volatility is not usually a result of the absence of thoughts about selling. Investing can be a lot like meditating; thoughts will arise in the moment that often should be observed and let go. It would be unreasonable for someone practicing meditation to expect to silence their thoughts. It is also unreasonable to expect that a long-term investor would never have doubts.

“The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored. He should never buy a stock because it has gone up or sell one because it has gone down.”[iii] — Benjamin Graham, The Intelligent Investor.

If you attempt to begin a practice of meditation but are discouraged by the flow of thoughts, you will likely never develop the practice. If, however, you can notice your thoughts and return to an anchor you will begin to find this easier to do with practice.

It’s not about preventing thoughts from arising, that’s impossible. The goal should be to distance yourself just enough from the thoughts to view them from outside yourself as an observer before acting. You should also keep in mind that, often, the only action you should take is to notice the thought then release it.