Saint Augustine said: “Patience is the companion of wisdom.”

Even though patience has been extolled as a virtue, it seems to be losing relevance in a world that chases instant gratification. Remarkably, nature and even the stock market reward the patient. Take a look at the annual returns of S&P 500 since 1928:

“While it’s interesting to look at S&P 500 returns for individual years, most people don’t invest in index funds for one-year periods; they invest for several decades. This is why it’s more interesting to look at decade-long annualised returns.

The S&P 500 delivered negative annualised returns in 11 out of 81 10-year periods (13.6% of 10-year periods) since 1928. During the best 20-year period (1980-1999), the S&P 500 delivered 13.2% annual returns.

The S&P 500 never delivered negative annualised returns in any 20-year period1.” Needless to say, the returns were even more positive in the 30- and 40-year periods.

Similarly, Unicorn also extolls patience as a virtue in order to derive results from investing over time. Exemplary opportunities to invest often present themselves after waiting for the market to correct significantly, or crash; such as during the last Subprime Crisis, 10 years ago.

This is a portfolio with Unicorn that has doubled its initial investment following our investment calls since 2011. The Client had started with a lump sum in Feb 2009, before the market reached its bottom in Mar 2009. And despite the returns in the past few years being relatively muted, the compound annual growth rate (CAGR) for the portfolio still works out to be 8.75% for the past coming 11 years.

However, not everyone invests near the bottom of the market. So even if the investment had commenced in 5 (Year 2004) or 10 years (Year 1999) before the bottom, the annual returns would still be 5.89% or 4.44% respectively for the above portfolio. It would look like this:

As Mahatma Gandhi had said: “To lose patience is to lose the battle.” Don’t lose the battle.



1.Four Pillar Freedom:


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