Investing can test even the best of us and reveal our true temperament. Most ideas may work well in theory or on paper. Rarely do they translate effectively into the real world. Humans are not well-equipped to stay the course when it comes to investing; often our biggest enemy is ourselves.

I often notice this in myself as we constantly challenge our own biases and behavioural tendencies in an attempt to outperform and win in the stock market. The system (stock market) seems to be rigged against us from the beginning. It is easy to read about what to do regarding investing, but much harder to actually put it into practice.

We know we need a thesis, yet we often buy stocks and then research them later. While we understand the importance of being long-term, patient holders, we tend to sell at the first sign of bad news or any hint of negativity. Staying the course and adhering to a long-term plan is easier said than done. Like many investors over the years, I have wavered between being disciplined and focused at times, while at other moments, I’ve acted like a novice, “tinkering” where it’s unnecessary.

😤 The struggle is always present.

We never truly overcome the biases and temperaments that are ingrained within us. Setting goals, writing investment policy statements, and thorough planning can work well in theory, but these aspects are often overlooked when it comes time to act.

At the first sign of negative news, investors may panic and sell. When they see a hint of red in their portfolios, they often second-guess their entire strategy, expecting everything to be up and to the right all the time.

🎢 Investing is a rollercoaster, oscillating between highs and lows, and it can shake out anyone who doesn’t have the temperament to endure the ride.

The stock market is influenced by emotions, fear of missing out (FOMO), greed, investor sentiment (temperament), and the short-sightedness of many. Sometimes, people ask me whether they should invest, and I often sense their immediate panic over potential losses or uncertainty. This leads me to suggest they consider carefully before entering the market at all.

The truth is, not everyone is suited for investing in the stock market…

🙅‍♂️ It’s not for everyone.

Just because some charts and statistics show that stocks generally outperform other asset classes, like real estate or gold, over longer periods doesn’t mean everyone should rush to invest in them. The best returns typically come from investments that you can consistently stick with over the long term.

I dislike it when investors or those who have found success say things like, “You can’t save your way to retirement or wealth.” That’s simply not true—you can. I’ve seen individuals with healthy savings and some minor investments achieve fantastic results. They may not have enjoyed stellar double-digit returns for decades, but they are nonetheless financially free, which was their goal.

Another common sentiment is, “You can’t beat inflation,” which prompts people to rush into the market to outpace inflation. However, if you maintain healthy financial habits, stay debt-free, save diligently, own a home, and aim for independence and a reasonable quality of life, you can still achieve these objectives without relying solely on the stock market. Ignore the naysayers.

Although I write about the stock market, my overall objective is Wealth creation. There are many paths to a fulfilling wealthy life.

Your temperament is important to understand.

Like the old saying goes, everyone has a plan until they get punched in the face—the stock market is exactly like that.

I’ve found that I can do everything right: follow the book, research companies, study them, create watchlists, write theses on holdings, and monitor companies, yet they can still move against me. Sometimes, you are too early to an idea, and sometimes you’re early but the company doesn’t get recognised, leaving you to remain in the waiting phase.

It’s an endurance sport…

Not every good idea is investable, even if the company itself is great. So much works against you as a small retail investor. Earnings can beat expectations but still fall short of investor hopes, causing stocks to drop. Conversely, the market can have subpar results, and stocks still rise.

There is so much volatility that it can shake you emotionally. If you have an element of anxiety, it only gets worse. You may find yourself logging in to check your brokerage account every hour or so.

Hoping for a positive outcome isn’t a strategy—you can’t hope your way to a multibagger.

It takes work, time, and patience.

You need to be stoic over long periods. Even then, you may not achieve the results you want. Developing the right temperament takes time. Even those whose behavioural makeup isn’t suited for active investing can cultivate the fortitude, mindset, and discipline to succeed in the markets.

There is so much literature, blogs, tips, and ideas out there that suggest investing in the stock market is as easy as 1, 2, 3. Sure, opening a brokerage account and placing a trade has never been quicker. However, investing and succeeding isn’t as simple as that.

It’s not often discussed how challenging being a full-time investor is. It rattles you. Some days you win, and some days you lose, and all of this impacts your mind. Like many full-time investors, my emotions can be tied to my performance (ask my wife). That is the reality of it all. I can handle losses; I’ve had plenty of them. But when other conditions in life are not right, I can wake up, see my portfolio in the red, and feel impatient with certain holdings that just won’t perform.

I take it seriously, and I get a little bothered. I have to remind myself why I am in this—is my long-term outlook correct? If so, I try to disregard the day-to-day and month-to-month reactions.

The problem with small caps is that just when you think a stock can’t go down anymore, it gets badly smashed again—and then again. You know the company is solid underneath; it’s just an overreaction, a sell-off from impatient investors, or funds quitting the thesis to rebalance. If you have conviction, it helps balance your temperament and behaviour.

Investing is about being right…and then patient.

The stock market is a game of psychology. I am constantly challenged, and it’s important to acknowledge that investing isn’t always good. You will experience long stretches of underperformance and periods where your portfolio lags and is in the red. However, you are rewarded for patience, being stoic, and staying the course. It does happen.

If anyone is considering actively picking stocks or even passive investing, you need to be honest with yourself. Some people are simply not cut out for it. Even I sometimes feel like I should hang it up. Not every day resembles a Hollywood movie where Michael Douglas is trading and making a killing.

I’ve started many companies and have been an entrepreneur for most of my life since I was 19 years old. I find building, scaling, and growing companies easier than investing. The investment world is challenging.

I believe it takes years to find a rhythm in investing. After studying many investors, talking to numerous individuals in the field, and spending 15 years in this world, I’ve come to realise that it takes time to settle into your groove and find your lane. You explore various styles and strategies, lose money, make some, and eventually find what works for you.

To be successful long-term as a full-time investor, your temperament must be in check. Always challenge your behavior and biases. If you have a system, stick to it; if you have a strategy, execute it. The market is not a place to navigate blindly.

🔑 The Key takeaway…

This may all sound a little discouraging, but that was not my intention. I aim to remind you to remain vigilant and focused at all times.

If you are a full-time investor, treat it as a profession. Remember, even the best jobs have down days, and investing is no different. Not every day will be fantastic or fulfilling. Some days will be great; you’ll excel and handle losses and disappointments with a mindset focused on the overall objective. However, when things don’t go your way, those feelings can compound.

Take a break and check your temperament.

You can beat the market—there’s no doubt about it. Many investors around us achieve just that. They experience bad days and disappointing results, yet they manage to bounce back. Investing truly tests your character and temperament. Will you fold when times get tough, or will you remain patient, disciplined, and courageous?

I find that some weeks flow smoothly; research is enjoyable, everything seems to have momentum, and you compound results and knowledge. You start to uncover opportunities, find winners, and build conviction. Other days, however, you may second-guess your research, information, and ideas, considering selling, cutting losses, trimming winners, and ultimately tinkering with your strategy.

I tend to get fixated on investing, and like many successful investors, this obsession can lead to great results, but it can also be mentally taxing.

This is the truth shared by many I interact with. Investing is a long-term game, a marathon. Accept that.

Those who can look back after decades of investing—having built substantial portfolios from the ground up—have all experienced battles, fought with themselves, and wrestled with their behavior and temperament every day to reach where they are today. There’s not a single smooth sailing story out there.

So don’t expect to be the first one…