Investing is one of the cornerstones of a solid financial plan, no matter who you are or at what age you start.

Whether you’re beginning your investing journey, or are already an investor who wants to become more disciplined, it could help to take inspiration from some of history’s most successful investors.

Here are three timeless quotes that could help you build your investment philosophy.

1. “Know what you own, and know why you own it.” – Peter Lynch

Peter Lynch, American fund manager and investor, famously said, “Know what you own, and know why you own it.”

While simple on the surface of things, this quotation is packed with wisdom that you could use when building your investment philosophy.

Firstly, reminding us to “know what you own”, Lynch asks investors to pay attention to asset selection. Ensuring you’re fully diversified, and are choosing your holdings according to your time frame and attitude to risk, could mean you’re aligning your portfolio with your long-term goals.

Speaking of goals, perhaps the sagest advice Lynch offers is to “know why you own it”. Interrogating the “why” behind your investing behaviours could help to motivate you. For instance, if you wish to retire at a certain age or leave a healthy inheritance to the next generation, those goals are your “why”.

Peter Lynch encourages all investors to hold their “why” in their mind’s eye – and here at iQ Financial, we believe the same. Keeping these goals at the centre of your philosophy could help you build a portfolio that provides the right returns for you and your family.

2. “Don’t look for the needle in the haystack. Just buy the haystack!” – John Bogle

John Bogle, former chief executive of The Vanguard Group and philanthropist, commented on the importance of diversification, saying, “Don’t look for the needle in the haystack. Just buy the haystack!”

When referring to investors who “look for the needle in the haystack”, Bogle is talking about those who want to invest in the “next big thing”, always looking for “special” stocks that will grow their money. But when you diversify, the “needle” is likely to be incorporated into your wider portfolio anyway – meaning you’re likely to benefit from growth and be protected from severe downswings too.

For example, 2023 saw the rise of US chip-making company, Nvidia, which has been one of the key drivers in the rise of artificial intelligence (AI). In May 2024, Morningstar reported that Nvidia shares were up 90% so far in 2024 and 200% in the previous 12 months. You could call Nvidia the current “needle in the haystack”.

No crystal ball could have predicted Nvidia’s rise, and in searching for the next rising star, you might have put your portfolio at too much risk. However, if you had invested in a US S&P 500 tracker fund, just one of many blended funds giving you a stake in a broad range of US companies, your portfolio would have benefited from Nvidia’s rise anyway. That’s what Bogle would call “buying the haystack”.

3. “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson

Paul Samuelson was an American economist who won the Nobel Memorial Prize in Economic Sciences in 1970.

His straight-to-the-point advice, telling investors to “go to Las Vegas” if they want excitement and equating successful investing to “watching paint dry”, might not make you feel thrilled about investing. But the point is exactly that: investing is a “slow and steady wins the race” endeavour – rushing to make a lot of money in a short time frame might not garner the best results.

Take this study by Nutmeg, conducted in 2022. Nutmeg looked at global stock market data between 1971 and 2022 and found that:

• If you invested for any 24 hours over this time period, your chance of a positive return was just 52.4% – similar odds to betting on a coin flip.
• Extend the amount of time you’re invested to one quarter (65 trading days), you’d increase your chances of seeing positive returns to 65.6%.
• Invest for one year, you would have made a profit 72.8% of the time.
• If you had remained invested for 10 years – any 10 years within the 50-year study period – you would have experienced positive returns 94.2% of the time.

Staying invested for 10 years or more and building your holdings without cashing in might feel “boring”. Yet investing as a long-term journey, not a short-term game, could produce more reliable returns, as the study definitively shows.

Work with specialist financial planners who can help you invest for a better future

We specialise in working with business owners who wish to build a solid foundation of personal wealth – and investing is integral to this mission.

To learn more about how we can help you build a portfolio that supports your ambitions, email us at clients@iqf.ie or call 353 71 915 5560.

Please note

This article is for information only. It does not constitute advice.

It describes the financial planning services that iQ Financial can offer to you. Financial planning services are not regulated by the Central Bank of Ireland.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.