The Benefits of Long-Term Investment Strategies

Consistent long-term returns, even at a lower rate like 20%, result in significantly higher overall performance over a period of 20 years compared to seeking higher single-year returns. The focus should be on sustainability of returns, as continuous compounding amplifies growth. Selling investments incurs substantial transaction costs and complicates the reinvestment process, which often leads to suboptimal allocation of capital. Keeping a good business running minimizes expenses and reduces volatility, enhancing the potential for wealth accumulation. Investing in a solid business model and maintaining it over the long term—without frequent buying and selling—provides far superior returns. It's also possible to restructure debt and manage the investment effectively without relinquishing ownership, further adding to the advantages of a long-term investment strategy.