Benjamin Graham is often given the title the ‘Grandfather of Value Investing’. He famously said “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” What he meant by this is that a voting machine deals with expectations day to day, but the weighing machine, in the long run, deals with actual economic benefits provided to the owners. Simply put, Graham is saying that the price and value of an equity may deviate significantly over the short term, but eventually will intersect. Investments have a tendency to gravitate towards their fair values in the long run.

He also called traders speculators. Traders are trying to figure out what is going to happen in the short-term and try to position their portfolio for profit. They have certain expectations for the future. Those expectations are baked into the positions they take. Those expectations could be on what the federal budget will look like, what the FOMC forecast for the next year, or the CPI expectation for the next month. They have an expectation about the future, and once they have decided what they think is going to happen, they look for signs that they are correct or incorrect.

Much of the volatility we see day to day is based on different pieces of data coming out that is making them re-think their expectations. This is where the term ‘priced-in’ comes from – there is consensus that an event will occur, and the aggregate position in the market reflects this consensus.

This contrasts to investors. An investor is focused on the inherent value of any investment and making decisions for the long-term to achieve a goal.

Time is one of the most valuable resources that an investor has. We have been told that long-term investing is the secret to success ad nauseum. These articles go through the proof. 

Let’s start from the beginning. What is the Time Value of Money? How does understanding its components make you a better investor?

Mark LaMonica achieved an 18,000% return by doing ‘nothing’. He goes through his story and the power of buying and holding investments.

Investing is a decades long endeavour. We’ve put together a decade-by-decade guide on what you should focus on in each 10 year period.

Future expectations play a large role in your investment returns. The case against timing the market and for long holding periods is laid out here.

Growth stocks require long time periods to realise their potential. This article looks at the 3 of the best ASX growth stocks in the market that investors could hold for the long term.