From the Merriam Webster Dictionary
Etymology: Middle English pacient, from Anglo-French, from Latin patient-, patiens, from present participle of pati to suffer; perhaps akin to Greek pēma suffering
Date: 14th century
1: bearing pains or trials calmly or without complaint
2: manifesting forbearance under provocation or strain
3: not hasty or impetuous
4: steadfast despite opposition, difficulty, or adversity
I’ve found the above definition enlightening mainly for the reason that it embraces the notion that there is pain/suffering as part of the process. Let’s face it our investment portfolios are not a distant speck of matter, they are for most of us, integral to achieving the dreams we have for ourselves and loved ones. It is only natural to be concerned if we are in or at retirement to experience some “suffering” when the value of our portfolio declines. It’s also natural to have feelings that it may not come back this time like it always has in the past.
Yet, while it’s important to acknowledge our feelings of pain when these events re-occur it is also important to embrace the notion that the other parts of the definition are also important to bring to the fore. The ability to go through provocation or strain calmly will most likely come from reviewing the factual history of previous declines.
In working with clients for the last 30 plus years the most susceptible time for investors wanting to make a change is when the markets are declining. This of course is when patience to “bear the suffering” is called for. For example the following chart shows that for a 240 month period from 1987 to 2007 that if an investor had missed the best 17 (7%) months of the market they would have lost ALL of the advantages equity investing and would have been better off in Treasury Bills.