Myron appraised him again. "It is and it isn't," he said. "Rewards are what you get for taking risk. If you want a big reward right away, you have to take a big risk. Over a longer period, you can take smaller risks—the smaller rewards add up; the smaller losses don't wipe you out. But there's another consideration." He drew a double headed arrow on the top of a yellow pad. "People have different senses of time."
Myron darkened each arrowhead. "Some live for the future; some live in the moment; some—most—are in the middle. It's a natural thing. As far as risk/reward goes, we can keep a given balance in any time-horizon. We can be risk-adverse, say, short-term or long-term." Myron underlined the arrow.
"What we don't want to do is mix up the two. Short—term and long-term investments are different. Not only are the investments themselves different, but someone who is patient and looks far ahead won't be happy with in-and-out activity. Someone who is action-oriented, who is used to seeing results right away, won't wait years for a company to develop or for interest rates to drop. You see what I'm getting at?"
"I do," Oliver said. "It's interesting. I guess I'm more toward the patient end. Risk? I don't mind risk. But I wouldn't want to lose more than half. It's important to me that half, anyway, always be there." Myron wrote a few words on the pad.
"There are advantages to the patient approach," he said. "Taxes are lower if you hold securities long term. You can buy into promising companies cheaply—if you can give them a few years to grow."
"I like that," Oliver said. Myron made another note.
"How about if I get you started, make the first buys?"
"Sounds good."
"As time goes on and you get into it, you may want to take a more active part in making the decisions. We'll talk as we go along."