What do many people misunderstand about long-term investing? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Something I've grown to appreciate is that the long run is just a collection of short runs. So if you're a self-described long-term investor it's wrong to say you can ignore the short run, dismissing it like it doesn't apply to you. You have to live through every short run, and long-term investors still watch their net worths evaporate in 2008, and watch their home equity go negative in 2010, and their bitcoin holdings drop 90% in 2018.
For 99% of people it's foolish to assume that those things won't affect you because you have the intention of a long time horizon. They hurt, and too many people underestimate how much that pain will change their willingness to modify their portfolio, which makes them ... no longer a long-term investor.
An example of this is the professional portfolio manager who says "I'm fine with a huge crash, we're here for the long run," and then a huge crash comes and all of his investors pull their money out and the fund goes out of business. His long-term view didn't matter; he had to manage the short run, and by ignoring it, he went out of business which prevented him from experiencing the long run. Spouses with a lower risk tolerance than you pulling the plug on an investment plan have the same impact. The solution is instituting a greater degree of room for error than many currently have.
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