Here's a short story about three different companies. Their total returns are currently a 215% gain, a 49% gain and a 28% gain since we recommended them to our members between February 2012 and May 2013. Unsurprisingly, all three are soundly beating the market. The point isn't to gloat, though.
It's to share an important lesson — after the first 12 months on the Motley Fool Share Advisor scorecard, those same companies had returned 2.9%, -11% and 7%, respectively — for an average gain of -0.3%. Hardly spectacular.
Their names, in case you were wondering, are Vocus Communications (ASX: VOC), ResMed (ASX: RMD) and Cochlear (ASX: COH).
Vocus has been one of the standout performers on the ASX 200 recently. Its business strategy is delivering, and investors with foresight and a long-term perspective were able to hold (or better yet, buy more) during this:
While they waited for this:
ResMed's shareholders had a somewhat bumpier ride:
But it was worth it:
And Cochear's short-term woes (and investor pessimism about China) gave us this:
But a little time changed investors' returns, markedly:
When it comes to investing, there's a magic word that all investors should have, if not tattooed, at least somewhere between their index finger and the sell button: Patience.
There was 28%, 49%, and 215% on offer for those who kept their cool and didn't rush for the exits in the face of stagnant or falling prices.
Oh, and if you're wondering about just waiting a year before you buy, Corporate Travel Management's (ASX: CTD) share price growth since its recommendation is one very good reason not to…
Sometimes, they just keep rising!
