“If you sit by the river long enough, you will see the bodies of all your enemies float by”. There is a debate about the origins of this saying, maybe Sun Tzu, maybe Confucius, bit whoever said it was wise.
Whoever the source, the phrase describes one of my fundamental beliefs. This idea helps me believe in the power of long term thinking that mixes basic values with patience and persistence.
Persistence is one of the most valuable qualities we can have. Benjamin Franklin said: “Energy and persistence conquer all things.”
I started thinking about persistence after reading about the “Standard & Poor’s Persistence Scorecard” a bi annual survey that ranks mutual fund managers. (More on the scorecard in a moment.)
I thought, “We all know the power of persistence, but how do we get it?” I started researching “How to become persistent”. I could not find much. Everything about persistence was about “How good it is”, not “How to get it”.
I hope you’ll help me answer the question. How can we be persistent?
For example to have persistence is to have patience by avoiding financial pressure. If we are trying to succeed at something new, it’s easier to concentrate if the wolf is not at the door, or the bill collector on the phone.
To this end, it’s worth reading a New York Times article “How Many Mutual Funds Routinely Rout the Market? Zero” (1) by Jeff Sommer. The article reveals that the latest study by Standard & Poor’s did not find even one US mutual fund that consistently outperformed the stock market over a number of years.
S&P conducts a study twice a year called “Does Past Performance Matter? The Persistence Scorecard.” This study shows that since the recovery of the US Stock Market beginning March 2009 not one of the 2,862 broad, actively managed domestic stock mutual funds actually remained in the top quarter performance over the four succeeding 12-month periods.
The article says: The study seemed to support the considerable body of evidence suggesting that most people shouldn’t even try to beat the market: Just pick low-cost index funds, assemble a balanced and appropriate portfolio for your specific needs, and give up on active fund management.
The article shares a truth that any one fund can beat the market over the long term, but the problem is that we don’t know which of them will. This makes a strong case for lower cost Index Funds.
Being persistent in finding value can help us become persistent in other endeavors.
What other ways can we become persistent? I hope you will share your thoughts on this with Merri and me.
Learn how to diversify into good value low cost index funds.