The Full Motley -- 1Q, 2015

If the more things change, the more they stay the same were true, then the less things change, the more they need a change.  Unfortunately, that misplaced dichotomy reaps more penalties than rewards, at least in the financial lifeline (it may be food for thought in personal lives).  Patience reaps the most rewards, sticking with a plan at least until the original design is flawed.  Other fields have greener grass, but to benefit from greener fields with investing is to assume higher risk -- and the greenest pastures this year are rarely the greenest next year.  This dangerous temptation is known in industry terms as "performance chasing," and it is one of the great temptations to overcome for a healthy financial life.

I recently benefited from blindly following my original design when buying an individual stock this month where it reached my buy-in amount.  I had planned to buy in at one price, buy more at another price, and (if the stock fell as far as I thought it might) to buy twice as much as an unreasonably low price.  The stock went below the first price, and I knew its fourth quarter earnings report would be announced in a couple weeks, so there was a great temptation to hold off until then because I could buy twice as many shares at a lower amount.  But, knowing that I was still in the learning stage of stock investing, I went ahead and bought at the first price.

The very next day, the company released great news and that stock went up 25% from where I bought it.  This week, they held their earning report and lo and behold, expectations of disaster were way off and the stock went up even higher, about 60% above where I bought.  Success despite myself.

Same is my commitment to the plan to rebalance quarterly.  I am not sure how often it benefits me, but it is a good habit to have.  Like I've said before, making the most money possible is not always the goal in investing.  We can always do better in every avenue of life, so the pressure to pick the best stocks or funds should not measure successful investing.  Granted, that is easy for me to say when my actively traded large cap fund won an award for most successful group (PRIMECAP).