Camille Van Vyve
08 Oct 2024
Patience is your best asset
Just like Roger Federer only won 54% of his points but 80% of his matches, long-term investors don’t need to win every trade. Instead, consistent strategies and the ability to wait out volatility often lead to success.
Roger Federer’s odds
Federer’s career exemplifies how small, steady wins can lead to significant long-term success. In his famous graduation speech at Dartmouth last year, he said: “In the 1.526 singles matches I played in my career, I won almost 80% of the time. Now, I have a question for all of you. What percentage of the points do you think I won in those matches…? Only 54%.” That’s a great, very powerful insight: winning just over half of his points, he still secured more than 80% of his matches.
Play longer
Even though Federer won an impressive 20 Grand Slams, his edge over opponents was just 4%. So, how did he maximize that slight advantage? By playing longer matches. In tennis, matches can be either best of 3 sets or best of 5 sets. When Federer competed in best of 5-set matches (like at Roland Garros or Wimbledon), his win rate increased by about 10%, despite his skill level remaining the same. This shows how extending the game can help turn a small edge into a winning advantage.
Patience changes everything
This exact same principle applies to the stock market. On a daily basis, the global stock market is only positive 54% of the time approximately, which might make investing feel uncertain in the short term. But over a longer time horizon, the probability of gains increases dramatically. For instance, while daily returns are essentially a coin flip, over the last century, the global stock market has been positive 75% of the time on a one-year basis, 88% of the time over 5 years, and 99,2% of the time over 15 years. The longer you hold, the higher your chance of success.
The power of compounding
Another key benefit of patience is the power of compounding. When you give investments time, they can grow exponentially, as returns are reinvested. This isn’t just about high returns—it’s about steady growth over time, letting the market’s natural ebbs and flows work to your advantage. The key is to let compounding work for you by staying invested, rather than trying to time the market or chase quick gains.
Play long term with Easyvest
Like high-level tennis, investing requires a steady hand and a long-term vision. Investors who are patient and let their investments grow over time are more likely to succeed than others. While the markets may fluctuate in the short term, the long game rewards those who stay the course. This is our strategy at Easyvest. Simple portfolios, based on capitalization ETFs, designed to maximize long-term return prospects. To better understand our approach, carry out a simulation on our website and contact one of our wealth managers.