The patience paradox: The challenge of long-term investing

Technology has accelerated the flow of information and made action almost effortless, yet long-term investing still requires time. In a world defined by speed, patience may be an enduring investment advantage. Daniella Bergman explores how investors can strengthen this underused muscle.

The “Marshmallow Test”, conducted by Walter Mischel and colleagues at Stanford University, is one of psychology’s best-known experiments. Children could eat one marshmallow immediately or wait for the researcher to return and receive two. The study became closely associated with delayed gratification and self-control.

Later, researchers at the University of Rochester examined the role of trust in the above process. Before facing a similar choice, children experienced either a reliable environment, in which an adult kept a promise, or an unreliable one, in which the promise was broken. Those in the unreliable environment waited for less time. This was not necessarily impulsive: If a future reward seems uncertain, taking what is available may be rational.

Together, the studies suggest that patience is not simply a fixed virtue or an act of willpower; it is supported by perspective, strategy and trust. We are more willing to wait when the future reward is credible. There are interesting parallels and learnings for long-term investors.

The danger of confusing activity with progress

For much of history, faster access to information offered an edge. Those who received data or news first could act before others. Technology has democratised many of these advantages. Market data, company announcements and commentary are widely available; AI can summarise information quickly; trades can be executed almost instantly. Investors increasingly experience markets at the pace of a social media feed, with every development inviting a response.

In a world preoccupied with speed, patience may be one of the few advantages that cannot be automated, outsourced or accelerated.

Businesses, however, operate on longer cycles. A mine can take years to develop; an insurer builds value over time; a retailer may need several reporting cycles to show that its customer acquisition strategy is working. This creates a tension: Investors have never had more ability to act, yet sound long-term outcomes require no intervention. Compounding is difficult to see in its early stages, and a lack of visible progress can prompt action even when the investment case remains intact. In this environment, patience may provide a durable edge.

What pressures us to act?

Beyond access to information, several behavioural tendencies pull investors towards impatience:

• Present bias makes immediate rewards more attractive than larger future ones.
• Loss aversion encourages us to escape short-term discomfort.
• Recency bias gives disproportionate weight to recent, vivid news.
• Action bias makes intervention feel more responsible than restraint.
• Overconfidence encourages the belief that we can time our exit and re-entry.
• Cognitive ease favours information that is easy to process. In an AI-driven environment, a fluent response can feel more credible than a nuanced expert view simply because it requires less mental effort.

These tendencies become especially powerful during uncertainty. Even investors with a long-term horizon can find today’s anxiety more compelling than tomorrow’s potential reward.

Building patience into the process …

Modern life is designed around immediacy: instant communication, same-day delivery, real-time entertainment and rapid answers. We have become accustomed to quick feedback, even where worthwhile outcomes remain distant. Delayed gratification must therefore be developed deliberately.

In The Science of Self-Discipline, Peter Hollins argues that achieving goals depends less on motivation and more on learning to manage our emotions, impulses and habits. He says success is less dependent on exceptional willpower than on systems that make it easier to choose long-term rewards over short-term gratification. For investors, this means preparing in advance rather than relying on resolve during a market sell-off.

Delayed gratification must … be developed deliberately.

These systems do not remove uncertainty; they create space for thoughtful consideration. In an age increasingly mediated by algorithms, wisdom requires us to slow down, weigh different perspectives and exercise human judgement. However, restraint is sustainable only when investors have reason to trust the process and the decisions behind it.

… and trust in the system

Research by Goldman Sachs into the neuroscience of trust suggests that people use similar biological processes to judge the trustworthiness of a person, organisation and technology. The brain evaluates perceived intentions and reliability cues, even when they come from AI. A polished interface or convincing answer may inspire trust without making the underlying system trustworthy.

In an age increasingly mediated by algorithms, wisdom requires us to slow down, weigh different perspectives and exercise human judgement.

This matters in investing. AI has broadened access to information and analysis, but its speed, opacity and capacity for authoritative-sounding errors mean a healthy degree of scepticism must be applied in the research process. Investors should avoid shortcuts, test theses and question the accuracy of information they receive.

Trust must be earned through transparent, consistent processes, clear explanations of how technology is used, accountable human oversight and consistent behaviour. This takes active engagement, time and patience. Judgement cannot be outsourced.

Patience is not passive

Patience should not be confused with inactivity. It means continuing when rewards are not yet visible, following a sound process and making decisions based on long-term objectives rather than emotion. A patient investor remains focused on fundamentals, valuation and the long-term thesis.

Investing is an extended exercise in delayed gratification. It asks us to forgo some consumption today, endure volatility and remain committed to a sound process in pursuit of future outcomes. This requires discipline, trust in the process and confidence in the investment manager, supported by a reasonable basis for believing that patience will be rewarded – a basis in the form of a long-term track record achieved by the consistent application of an investment philosophy and process.

Technology has made information abundant and transactions seamless. However, it has not altered a fundamental truth: Time remains a key ingredient in long-term wealth creation. In a world preoccupied with speed, patience may be one of the few advantages that cannot be automated, outsourced or accelerated.

How to practise patience as an investor

• Keep a written long-term plan. Recording why you invested can provide an anchor during uncertainty and help prevent knee-jerk decisions. Include if-then scenarios that indicate how you will respond to specific market events. For example: “If markets fall sharply, I will revisit my investment objective, time horizon and investment thesis before making changes.” This can make disciplined behaviour more automatic and reduce emotionally driven decisions.
• Check your portfolio less often. Once you have a long-term plan, frequent monitoring – more than once a quarter – increases the risk of reacting to short-term noise rather than long-term fundamentals.
• Measure progress against goals, not market movements. Focus on whether you are on track to meet your objectives, rather than whether your portfolio is up or down this month.
• Remember that short-term volatility is normal. Market declines are part of long-term investing, not necessarily evidence that something is wrong.
• Lengthen your time horizon. Before acting, ask whether today’s news is likely to matter in five years. Many short-term concerns fade when viewed through a longer lens.

In the end, the lesson of the Marshmallow Test may not be about self-control alone; it is about the willingness to wait when the future reward is credible and worth pursuing. Long-term investing asks the same of us: not simply to resist the first marshmallow, but to build the trust and discipline required to wait for the second.