I have recently attended an extremely motivating and enlightening conference in Knysna. One of the key speakers specialises in ‘business incubation’, which is actually the scientific approach for a third party to ensure the acceleration of success in developing enterprises.

He touched on an interestingly simple yet profound study called ‘The Marshmallow Test’, which fundamentally pertains to self-control. Basically a group of little children were given a marshmallow and were promised if they didn’t eat it would get more at a later stage. Of course children being children, some couldn’t resist the temptation of this delicious, soft, sweet, yummy marshmallow and gave in!
However some actually did wait as they knew full well that their patience would be rewarded with another marshmallow.

Apparently further tests revealed that the children who were patient later on in their life become more successful and balanced as compared to the others. It is quite an apt study that proves the benefits of self-control and can be applied to investment strategies very well.

It is no secret that the longer one remains in the market the more likely they will succeed in investment growth firstly because of compound accumulation and secondly because of successfully riding the wave of financial cycles. Self-control of emotions is extremely essential for a long term investment strategy, be it regarding to exiting from markets prematurely or switching from funds when they have reached a downward swing.

We tend to focus our minds on immediate growth and forget that patience can actually ‘double our marshmallows!” A long haul investment approach with the right strategy and suitable management always reaps a handsome return in the end.