If Your Investments Bore You, You’re Getting It Right

There’s a lingering misconception among people who don’t know much about investing, and it may be a reason that many are unwilling to start. It’s that investing involves lots of activity and effort: keeping up with the latest financial news, studying the markets, seeking out investment tips, and continually buying and selling units or shares in accordance with what the markets, financial news and tipsters are telling you.

That’s not what long-term investing should be about. The most successful investors are often those who put money into a well-considered investment and then forget about it for 30 years. If you’re buying and selling in the short-term, you’re not investing, you’re speculating. Not only does market volatility make the risk of loss higher, but you are failing to capture growth through compounding, which only performs its magic over long periods.

Paul Samuelson, the 1970 Nobel laureate in economics, put it like this: “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

George Soros, the Hungarian-born billionaire financier and philanthropist has the same view. “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring,” he is quoted as saying.

Amid the current global uncertainty and financial market noise, Duma Mxenge, Head of Business and Market Development at Satrix, makes a strong case for the power of steady, consistent investing. “It’s boring,” he says, “but it works.”

Mxenge says exchange-traded funds (ETFs) can form the core of a stable, diversified long-term portfolio and offer a simple, cost-effective entry point to the investment markets.

In the current environment, Mxenge urges investors to keep their cool. “There’s always a hot topic. But I’m not going to build my portfolio around a single binary event. That’s not a strategy, it’s a gamble.”

He recalls fielding panicked calls from friends earlier this year when global tariffs dominated the news headlines. “Everyone wanted to know what to do. My advice? Do nothing. Sometimes the smartest move is to hold your position and keep building. Doing nothing is a strategy.”

According to Mxenge, history offers some perspective on the results of investing around single events, or fads.

“Centuries ago, the Dutch experienced the first ever stock market bubble with the Dutch Tulip Bubble from 1634 to 1637, where speculation drove the price of the exotic flower to extremes.”

The Tulip Bubble was the first of an ongoing series of boom-bust events where extreme buying was driven by speculation rather than true value. “A more recent example of a speculative bubble is the NFT, or non-fungible token, craze. According to Forbes Australia, by mid-2023, 95% of NFT collections were deemed worthless. The NFTs’ lack of utility and oversaturation, similar to the Dutch tulips, ultimately led to their collapse,” Mxenge says.

Mxenge says long-term investing isn’t about hype, heroics or excitement; it’s about building wealth steadily, over time. “When everything else is uncertain, your investments should bring you peace of mind. ETFs allow that. Boring is the new brave.”

And if you’re just getting started? His advice is simple: “Start with exposure, build knowledge, and only then consider taking more targeted positions. Doing nothing, staying invested, and staying diversified – that’s what works.”