I bought shares today

I bought shares today.

For some of you, that might feel notable. For others, hopefully long-term members and readers, that will come as no surprise.

But let me tell you about it.

Actually, I can only tell you some things. If I told you what I bought, I’d probably be fired!

The Motley Fool has a strict trading policy which, among other things, bans me from writing or talking about the companies I’ve purchased (or sold) for two full market days either side of me making the trade.

Why? Because while I doubt very much that me doing so would make any difference to the share prices at all, it might. And the possibility, and perception, of something untoward is enough to mean it’s a no-go.

It’s a really good trading policy. Justice, as they say, not only has to be done, but has to be seen to be done, and our policy covers both.

So, because I like both my job and my paycheque, I’m going to stay on the right side of our policy!

That said, what’s the point of saying ‘I bought shares’, if I can’t tell you which ones I bought.

Well, it’s because at times like these, it can be tempting to be paralysed by geopolitics, inflation, interest rates, headlines, and a falling ASX.

Tempting to wait until the coast is clear: the war in Iran has been resolved, inflation settles, rates start falling again. Until things just… feel better.

Here’s the problem with that approach. There’s two problems, actually:

First, the coast is never truly clear. There’s always something to worry about. Some headline. Some risk. Someone predicting doom and gloom.

Second, the times when the coast feels clear, are the times when share prices tend to be at their highest – because everyone else feels the same.

But remember Warren Buffett’s words: ‘you pay a very high price in the stock market for a cheery consensus’. In other words, when everyone else is feeling good, too, there are rarely bargains to be found.

And also… those ‘what could go wrong’ times tend to precede, well, things going wrong!

Now, I also want to share what wasn’t a motivation for buying shares today.

I’m not saying this is ‘the bottom’.

I’m not saying shares can’t fall from here. Maybe even meaningfully.

I’m not saying this is some amazingly perfect time to buy.

In other words, I’m not timing the market.

I bought shares today because I have cash. And because I believe in the businesses I bought.

I bought shares today because I think that in 5, 10, and 20 years’ time, they will be worth more.

Hopefully much more.

And if I’m right about the businesses, and their future value… why wouldn’t I buy?

Oh sure, in a year’s time, I’ll be able to tell you exactly the dates I should have bought, and the prices I should have paid.

Maybe earlier, or later than today. Maybe at lower prices.

Thing is… that stuff is impossible to know in advance, and there is literally no value in beating yourself up.

The other thing? Well, if I’m right about that future value, the growth that’s coming will hopefully dwarf any nickel-and-diming over trying to guess where the bottom might be.

And in reality, you can only know where the bottom is after you’ve reached it and started climbing, so you’ll miss it anyway!

And then, how do you know the shares won’t go back down? So you wait a little longer…

And then 10%, 15% or 20% goes by. Maybe you buy then. Or maybe you don’t, because you’re cursing yourself for missing ‘the bottom’ and you’re waiting for the next one.

I mean, be my guest, but you might find that you should have just bought at reasonable prices when you had the chance.

Me? I’m buying at what I think are reasonable prices, today. What happens next is outside my control. Maybe they shoot up. Maybe they crash. Maybe nothing.

There’s no way to know, and a lot of time, effort, energy and emotion is wasted in the process of trying to guess.

I don’t know where prices will be tomorrow, next week or next month.

Investors never do.

But time is the friend of a quality business, to paraphrase Warren Buffett, especially one bought at a reasonable price.

So, I bought shares today. I’ll do it again soon.

I’ll buy again not long after that, too.

And I’ll keep doing it, regularly adding to my portfolio with my eyes not on the headlines, but on the horizon.

It’s a time-tested approach, and I suspect it’ll keep working for decades to come.

Fool on!

The post I bought shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.