For long term use only

When you eat a chocolate bar, you expect the sweetness to last about 5 minutes.

When you watch a movie, you expect to be entertained for 2 hours.

When you buy fresh groceries, you expect to eat over the next 7 days.

A tube of toothpaste does its job for about 2 months.

The batteries in your remote will get you through the next 9 months.

A smartphone will get you about 3 years of use.

When you drive a car, you expect it to last about 10 years.

Owning a house, you’re generally happy with about 25 years.

Whenever we buy something, we make an assumption about how long it takes to get the full enjoyment out of the product. If you expected a movie to get to the good part in the first half hour, you’re going to be disappointed. If the best part of owning a car was the first 100 miles, it’s not going to work out. Different products need different amounts of time to do what they’re supposed to do.

A stock portfolio is no different. If we treated it the way we treat groceries, toothpaste or the batteries in a remote, not much is going to come of things. Stocks represent ownership in business, and business conditions just don’t change that quickly. So if you’re ok with waiting three years in between smartphones, at the very least you might consider the same amount of time for a stock portfolio. Stocks are wonderful products, as long as we keep in mind the instructions on the label: for long term use only.  

Ben Kizemchuk is a Portfolio Manager & Investment Advisor with Altus Securities Inc offering investment management and planning for high net worth Canadians. Ben focuses on the Growth and Income Portfolios and reducing tax.