Image source: Getty Images
One of the great things about investing in shares is that you don't have to do anything with them, while you hold them. There's no rent to collect, no bills to pay, and no agents to deal with.
The companies just… do their thing.
It was that thought which prompted this tweet, on Saturday afternoon:
So, the ASX was closed today, because it's a Saturday.
Yet, listed companies went about their business: mining, selling groceries, processing transactions, collecting rents, providing insurance, generating electricity, and more.
The market is a sideshow.
I followed it up with:
When you own shares, you own small pieces of real businesses. If you only see them as things to buy, swap and sell, you're missing the point, and being distracted from the real value creation.
Focus on the company, not the stock.
And then this:
Honestly, I'd be happy if the market opened for an hour, once a week.
Or a month, for that matter.
The minute-by-minute volatility is noise and action… but not much more.
Like my woodwork teacher's sign:
"Don't be like a rocking horse: plenty of movement, but no progress"
I figured it was a pretty stock-standard few tweets, and I didn't expect much engagement.
But I was wrong.
More than a few people told me that Bitcoin was better, because it could be traded 24/7.
Uh-huh.
A couple of others told me they wanted the market open longer because it'd mean they could trade on the back of US news, or to avoid big share price movements at the beginning and end of the trading day.
In response?
I told them I couldn't care less.
Truly, who needs to trade shares at 2.47am?
Or on a Saturday?
Sure, you can buy and sell Bitcoin 24/7 but… so what?
Because let me remind you that there is no correlation between activity and success in the stock market.
Those who trade more don't do better. In fact the research suggests exactly the opposite.
I can't emphasise this enough, either: if you think you need the market open longer, or that you want to be able to trade more often, I think you're missing the point.
(Too harsh? Sorry, but it's true.)
The money in investing isn't made in the trading. It's made in the waiting.
Waiting while Woolworths Group Ltd (ASX: WOW) goes from $4.72 in 1999 to $31 today.
Waiting while BHP Group Ltd (ASX: BHP) goes from $4.91 to $45 over the same timeframe.
Waiting while REA Group Ltd (ASX: REA) goes from $1.09 to $184.
Do all companies do that? Nope.
But let me remind you that according to fund manager Vanguard, an investment in the ASX over 30 years to June 30 last year turned a hypothetical $10,000 into over $130,000 in three decades – that's with both the winners and the losers included.
The market didn't have to be open 24/7 over that 30 year period.
In fact, if it was, it would have just tempted more people to trade more often… rather than just biding their time.
Yes, the ASX will probably eventually go 24/7. But it won't be to help investors. It'll be to help the exchange, and stock brokers, make more money from more activity.
Note: not more 'wealth creation', but 'more activity'. You didn't think most brokers were on your side, did you? (There are some noble exceptions… but not many.)
In the meantime? My investment strategy – and investment actions – wouldn't change one iota if the stock market was only open for an hour, once a month.
Why would they?
I buy quality companies when they're available for good prices, then hold them for as long as it makes sense to do so… hopefully for years and decades to come.
That's investing.
Everything else is noise.
(Oh, and speaking of noise, there are some fake social media ads going around, using a video of me and dubbing some dodgy offers over the top. And others using fake accounts in my name. Please be careful if you see them – always check the source!)
Fool on!
