Patience is a great virtue while investing as well

Patience is a great virtue, and that holds true in most walks of life, including the sporting and investing arena.  Rahul Dravid is arguably India’s best Test batsman to date. He still holds the record for the most number of balls faced by any Test batsman, reflecting his ability to stay at the crease for long periods. Dravid’s role with the bat in the wins of the Indian cricket team in Tests in England, Australia, West Indies and even Pakistan is reflective of how he was able to wear down strong opposition with his patience and tenacity, besides batting technique at the crease.

So also is the case with investments. I recently had a friend, who resides overseas, drop by on a visit. He insisted on taking me out for lunch insisting that he owed me not one, but many, and said that he had a document to show me. 

And thus we met, and he thrust a mutual fund statement at me. It was a statement of an equity mutual fund investment he had made sometime in the first half of the last decade, that is around 15 years ago. 
He was leaving India back then and he reminded me that when asked, I had suggested that he invest part of his flat sale proceeds in this mutual fund scheme, which I too had invested in.

He had invested a sum of approximately `50 lakh back then in that fund and left India soon thereafter. As a policy, whenever I invest in equity, I assume that my minimum time frame will be seven years and ideally 12-15 years, subject to the goals I set for that investment to achieve. And being a good friend, he said he had remembered my words and after a while, even stopped looking at the value of that mutual fund investment. 

On his latest visit to India, my team had helped him retrace and compile a list of all his investments, many of which had all but escaped his memory. And it was thus that he re-discovered the earlier mentioned investment of `50 lakh in a mutual fund scheme that had performed exceptionally well over time to stand at, hold your breath,  `10 crore plus!!!   
He was not only profusely thankful but also brought to my notice that almost none of his other investments thereafter which he had made through a renowned private bank had fared well. He claimed that they had repeatedly changed his holdings.  

I told him there were three primary reasons for his windfall gains with this investment. One, he was wise enough not to reinvest his property sale proceeds in another property in the pursuit of a tax break. Two, he was preoccupied perhaps and hence did not react to the many market upheavals over the last decade and half, particularly the equity market rout in 2008. Three, he had by accident, if not by design been patient with this investment and allowed it to compound. 
After all, patience is a great virtue.