The Power of Patience and Diversification in Investing

When we started Excess Returns, we wanted to come up with one way to boil down the best advice from the experts we have interviewed into one simple question. That led us to create a standard closing question that we ask all of our guests, “Based on your experience in the markets, if you could teach one lesson to your average investor, what would that be?”.

Over the history of the podcast, we have asked that question to close to 200 guests ranging from great investors to academic experts to options and macro traders. In this episode, we share the answers from our 50 most popular guests all in one episode. Featured guests include Liz Ann Sonders, Cliff Asness, Guy Spier, Michael Mauboussin, Mike Green, Cem Karsan, Chris Davis, Aswath Damodaran, Jack Schwager, Rick Ferri and many others.

Topics Covered:The fundamental purpose of investing: preserving and growing wealth rather than getting rich quick

The importance of base rates in investment decisions

Portfolio monitoring frequency and its impact on investment psychology

Viewing stocks as ownership in actual businesses rather than trading vehicles

The value of patience, humility, and self-forgiveness in the investment process

Diversification across asset classes, strategies, and time frames

The benefits of simplicity in investment approaches

The psychological challenges of investing and how to overcome them

Compounding as a fundamental wealth-building tool

The danger of performance chasing and overconfidence

The value of a rules-based investment process