Investing with Resolve: How Discipline Drives Success
As we have entered the new year, many of us are thinking about resolutions. Whether they focus on health, fitness, or personal development, sticking to these resolutions requires discipline which eludes many Americans. In fact, a study by the Fisher College of Business in 2023 suggested that only about 9% of New Year’s resolutions are maintained for a full year, and 43% of them don’t even make it to February.
Alarmingly, the same kind of discipline that drives success in personal goals is essential for success in investing. This is why we are never surprised to see the annual Dalbar studies consistently show that the average investor significantly underperforms the stock and bond markets—and even fails to keep up with inflation.
Investing, like maintaining a resolution, requires commitment overtime—especially during periods of uncertainty or strong market performance. In good times, it is easy to get caught up in the hype of recent winners. Chasing hot trends or buying into the most popular stocks often leads to buying high and suffering losses when those investments inevitably correct. At CPC Advisors, werecognize that the key to long-term wealth is staying disciplined and stickingto a well-thought-out strategy, regardless of market fluctuations or emotionalimpulses. The discipline to avoid chasing trends or prematurely exiting aposition during a bull market could be crucial for maintaining a consistent,long-term approach.
This same discipline is just as critical during more challenging market environments. When the markets are down or economic uncertainty looms, the temptation to panic and sell investments can be overwhelming. In these times, staying invested—or even increasing positions—is often the best course of action. Much like maintaining a diet plan through the holidays or staying committed to an exercise regimen during busy weeks, perseverance through market downturns is essential for what may be long-term success. Exiting the market at the wrong time often leads to missed opportunities when it inevitably recovers. It is important to trust your investment plan and remain focused on the bigger picture, even in times of volatility.
Like any personal goal, the key to success in investing is consistency. Maintaining discipline—staying focused, sticking to your strategy, and avoiding emotional decision-making—helps investors build wealth over time. Fortunately, CPC is here to be your most trusted partner. We can’t help you avoid that cheeseburger or wake you up at 5:30 to go for a run, but we will help you maintain a disciplined and thoughtful approach to investing throughout 2025 and in the years ahead.
