What is the fuss?

Investing is boring.

Those who enter stock investing to get the thrill of getting rich quickly, more often than not, burn their hands and learn the lesson of being patient the hard way.

Returns from investment come from a combination of good research, patience, inactivity, and allowing compounding to work its magic.

There are many blogs and books on perfecting the first part, researching and stock picking. But what about the second and equally important part, the boring part?

The itch to keep on doing something is hard to resist. The concept of hard work leading to success is deeply ingrained in our brains.

If we don’t work hard and take action constantly, we may feel we don’t deserve good results.

But in the world of stock investing, it is the opposite.

The hard part of the work is done before investing and building a sizeable position in select, high-quality stocks. After this, the harder part of going against your default beliefs, showing patience, and doing nothing work better.

In this post, I lay down five ways to excel at the second boring part of doing nothing and still get rewarded. Let’s get started.

Do note that this post assumes you have done the first part well: researching, picking stocks, and constructing a high-quality stock portfolio.

Way 1: Use GTT and Limit Order features

Pre-deciding what future action to take is a good way to avoid the itch to act daily or hourly.

Good Till Triggered (GTT) and Limit Order are features that help with this.

GTT orders set a buy or sell price, as per your research.

If you want to buy, you can keep a low GTT buy price compared to the current trading price per your valuation comfort.

If you want to sell, keep the GTT buy price higher than the current trading price.

GTT orders are valid for one year once set. Hence, they are my favourite.

I simply put GTT buy orders, and then these stocks are bought during market corrections on their own. I do not have to check the current stock price daily and adjust my buy price. Neat!

Since a company’s fair valuation, adjusting for its estimated future growth does not frequently change within a year, the GTT Buy price you set will mostly work throughout the year.

GTT orders relieve you of not waking up daily and checking market news to set up new buy or sell prices.

You can revisit your GTT prices once every quarter when the quarterly earnings report comes out and future guidance is reinforced or revised.

Way 2: Uninstall Stock Investing Apps and use Websites instead.

Mobile applications exponentially increase the itch to see your stock portfolio and tinker with the buy and sell price.

Buying slightly lower daily and ending the day with a couple of bucks in profit does give one a sense of winning.

However, the cost of these daily and hourly distractions is high and often impacts the long-term compounding journey.

Solution: Uninstall all mobile apps for stock investing. It is hard to switch off of the avenues that distract you frequently.

Just use websites. Website use forces you to find time to sit down on your laptop or PC, typically at home.

Mobile screens are optimised for small screens and only show what matters most to the user: profit/loss and stock price movement. Hence, mobile screens lead to faster reactions from investors.

Websites also have much more information (wider screen benefit), resulting in more thorough research.

Way 3: Research more of what you own.

It is only natural to be attracted to what you don’t own.

All investors think there are better stocks out there that can generate huge profits for them.

Social media fuels this “Grass is greener on the other side” syndrome.

Stock research analyst interviews, YouTube videos, WhatsApp, and Telegram channels are always filled with the next best stock opportunity. Buy now or regret forever schemes.

How does one tackle this constant allure, which triggers short-term action and often leads to a bloated, over-diversified portfolio of low-quality companies whose prices are manipulated or ride a short wave of euphoric investor sentiment?

One solution that works for me is to research the companies already in my portfolio and further that research into the industry.

This has multiple benefits.

First, your conviction in the stock rises. Conviction prevents you from selling low when the market is in a downturn, or your picked company faces headwinds.

Second, each research adds pointers to your buy-and-sell framework.

You are clearer on how your chosen company is building a future for itself, which will reward its shareholders. And what are the potential risks that can negatively impact this strategy?

Are there any key future events to watch out for? Will the company’s current investments show results soon?

Third, the industry research tells you how your picked company is faring compared to the industry. You would want your company to fare slightly better than the industry. This relative over-performance will lead to higher returns for you.

As your industry knowledge deepens, you become aware of industry trends, cycles, and key future growth triggers.

Most importantly, this constant research will keep your mind and time occupied, preventing you from focusing too much on what you don’t own.

So, keep calm, focus on what you own, and research more to build a conviction in your portfolio stocks.

Way 4: Stick to a Buy/Sell Framework

This method might be simple to read but difficult to follow.

Every experienced investor has a framework for buying and selling stocks. This framework can include a checklist of questions, certain technical thresholds, some fundamental must-haves, and a valuation range to buy into and exit from.

If you don’t have one, start building one.

If you have one, stick to it and evolve it over time as your financial goals change and you learn from experience.

If your framework says not to exceed 20 stocks in your portfolio, don’t buy more than 20.

If your framework says to buy a company at a 10% discount to the last five-year average PE (or PB), then only buy if the stock price enters your comfort zone.

Sticking to a framework ensures you don’t make impulsive decisions. You run buy-and-sell decisions via your framework, and if they don’t fit, you don’t act.

This method requires discipline to follow a framework. Even if you have just started investing, enforcing a framework is a good idea to have discipline.

Way 5: Do Investing part-time!

Well, investing is not all you have got to do. You can do something else.

Unless you manage other people’s money, you have fewer responsibilities to take care of and reports to make.

You can take up a hobby or two, do a part-time job, etc.

Keeping your mind off the stock market, whatever way you choose, helps.

When you have been working on one thing for a long time, you may feel the urge to act, change something, or get something moving. In the second stage of investing, we want to avoid these things and elevate patience and inactivity.

So, find something else to do, making stock investing part-time and not full-time work.

Parting Thoughts

I’d like to re-emphasize that this post assumes you have done part 1 of stock investing right: picking the right stocks and creating a high-quality, concentrated, yet diversified portfolio.

It might seem counterintuitive to read that boring investing is tough. But it really is. The current education system, rising competition, and information overload make it even harder to sit tight and follow a patient path.

The above five ways work well for me. As you dig deeper into your daily lifestyle, you might find newer ways to excel at the boring stage of stock investing that suits you.

If you did, share them in the comments below. I would like to know your pro ways to excel at doing boring stock investing.

Happy Investing!