Making good use of time is critical for successful investing. Investors need to take a strategic approach in allocating their time for researching investments, managing portfolios, tracking market movements etc. With limited time available, investors must identify high-return activities to focus on. This article discusses key strategies for investors to effectively leverage time as a strategic investment asset, a valuable but often neglected resource.
Set clear goals and priorities for how to invest time based on expected investment returns
Investors have many demands on their time – tracking different asset classes and securities, analyzing financial reports, meeting with advisors etc. Without disciplined time management, days can slip away with little progress made. It is critical to consciously allocate time to high priority investment activities that align with personal financial goals and risk appetite. For instance, a retiree primarily concerned about wealth preservation should concentrate time on monitoring existing income investments rather than exploring speculative ones. Investors targeting high capital gains may devote more effort to securities analysis and due diligence for finding hidden gems.
Build a routine to regularly track investments using minimum necessary time
Monitoring investments consistently is important for performance and risk management, but can become time-consuming. Investors should strive to develop weekly/monthly routines optimized for their portfolio characteristics – balancing rigor with efficiency. This includes tracking metrics like valuation changes, earnings surprises, dividend payouts and macroeconomic trends affecting holdings. Checklists, spreadsheets and apps can systematize tracking. Investors should start by determining minimum insightful data needed to spot red flags; not wasting time digging beyond useful thresholds just for extra visibility. Streamlining tracking routines frees up time for value adding activities.
Take advantage of time arbitrage opportunities from market over/under-reactions
Investor sentiment and momentum can cause market prices to diverge from intrinsic value temporarily before mean reversion. Patient investors attempting to profit from these anomalies via contrarian investing or value strategies require time for positions to converge toward fair value. However, acting decisively when clear opportunities present themselves allows capitalizing before the arbitrage closes. Investors should focus time on understanding catalysts that could spur reversion, while avoiding distraction from short term noise. For instance, ignoring sensational market reactions to perceived negative events creates a window for buying high quality assets at a better price.
Develop strategic partnerships to leverage others’ expertise and shared diligence
For accredited investors, forming partnerships with professional analysts or like-minded investors allows efficiently harnessing specialized skills. A medical doctor lacking industry insights could jointly invest with an experienced technology banker targeting healthcare innovation. Partners can divide up diligence and monitoring efforts across asset classes and issues based on individual expertise, then share collective wisdom before deciding together. This enables much deeper investigation of complex or esoteric opportunities than investors could reasonably achieve independently within time constraints.
With thoughtful organization and discipline, investors can utilize time itself as a strategic asset multiplier. Prioritizing objectives, streamlining routines and capitalizing on partnerships preserves this scarce resource for value creating activities – ultimately working smarter, not just harder. As legendary investor Warren Buffett wisely notes, “The most important investment you can make is in yourself.”