The Patience Premium: How to Outlast the Market in the Age of Low Returns

What if the greatest advantage you could have as an investor wasn’t a secret algorithm or insider knowledge, but simply the ability to wait? In Investing Amid Low Expected Returns, Antti Ilmanen argues that patience is the ultimate competitive edge. In a world where performance is measured in days and headlines scream for attention, most investors are their own worst enemies—jumping from strategy to strategy, selling out at the bottom, or giving up just before compounding works its magic.

The data is clear: those who stick with a sound process, even during long stretches of underperformance, are rewarded with higher long-term returns. This is the 'patience premium'—the extra return that comes from enduring discomfort and resisting the urge to act on every whim. Behavioral finance research shows that impatience and outcome bias (judging your process by short-term results) are the main reasons most investors underperform their own investments. 3

So how can you develop patience? Start by setting goals based on process, not outcomes. Keep a journal to track your decisions and emotions, and review your strategy regularly to ensure it still makes sense. Accept that setbacks are inevitable, and remind yourself that compounding only works if you give it time. Surround yourself with reminders of your long-term plan, and avoid the temptation to react to every market move.

Patience is not passive—it requires active effort to stick with your plan when everyone else is panicking. But the rewards are worth it: over decades, even modest returns can snowball into significant wealth. In the end, the market rewards those who can wait. Will you be one of them?