Fast and cheap – but at what cost?

“In just a few days, the money will be in your account.”
“Oh, so you’re acting very short-term, then?”
That’s how quickly a misunderstanding can arise.

This exchange took place last week at a client event in Eisenstadt, in beautiful Burgenland. My colleagues were explaining that we invest in highly liquid securities, in other words, in investments that can be turned into cash quickly, especially compared to the real estate mentioned earlier. Once sell orders are placed around the globe, and including settlement time, liquidity is available within a few days.

Our guest, however, seemed to have taken away that we’re fast-moving traders. Good thing he asked, because that’s definitely not the message we wanted to leave hanging in the air.

Discipline beats speed

Of course, it’s true: securities allow for quick action. Real estate takes longer. Each contract is unique, requires careful review, and needs to be handled by several third parties. That takes time and costs money, often around ten percent. By contrast, transaction costs for securities usually stay well below one percent.

But the combination of speed and low cost can be a double-edged sword. A few clicks, and the transaction is done, the position changed. The only immediate consequence is often the tax on realized gains.

That’s precisely why it’s an underrated advantage of discretionary portfolio management to stay a bit removed from the market’s daily noise. The agreed investment strategy is executed with discipline and without emotion. Of course, one can always pick up the phone and shout “Sell everything!” But in most cases, it’s enough to create a small pause between impulse and action.

That space, the room for deliberate, rational decision-making, often makes all the difference.

And that’s what we’re here for. More important than you might think.