Good morning & happy Monday!
“People think they want an accurate view of the future, but what they really crave is certainty.”
Morgan Housel, except from his book “Same as Ever”
The last few weeks I’ve spent these weekly emails addressing my significant disdain for the financial media. I’ve been pretty hard on them, rightfully so. But if they cause as much damage as I propose, why do so many people tune in, subscribe, and visit websites of financial news outlets?
My hypothesis is that it is because of human nature’s desire for certainty.
We live in a very uncertain world, and it would be really nice to have some certainty sprinkled in there every now and then.
So, we turn to media outlets we trust to get their professional take on the matters on our mind. We are desperately hoping they can tell us what the uncertain future holds. In many cases they don’t know any more than you, but because we have deemed them as experts, we trust what they say.
Who’s going to win the election in November? By all accounts it seems the race is pretty much a 50/50 toss up at this point. But if you want to find a poll that favors your preferred candidate you don’t have to look far.
And BOOM … there it is … certainly my candidate will win the election.
Never mind whatever bias was built into the poll … it gives me the peace I’m seeking about the future. It may or may not be true, but it gives me peace of mind believing that I have a window into the future.
This can be done on a variety of topics from who’s going to win the Super Bowl to how many hurricanes we should prepare for.
News flash … NOBODY KNOWS!
But we so badly want to know … it’s human nature … because we crave certainty.
It’s not hard to see how this unfolds in investing.
If you think a recession is coming, there are plenty of podcasts, newspaper articles, and broadcasts that will validate your belief.
What about gold? Is it about to skyrocket? You will find countless options on this topic.
How is the US dollar going to perform against the Euro, Yen, or crypto currencies? Whatever you want to hear, there are sources who will provide you with that exact answer.
We live in an uncertain world and there is a tremendous amount of uncertainty in virtually every aspect of life, investing most certainly included.
But this is not bad news. Actually, quite the contrary 😊. This uncertainty is what creates the opportunities for us to profit as investors. Historically, when we have seen more uncertainty there is more opportunity.
Ok, so what the heck are we supposed to do about all this as investors?
What I’m asking is so unbelievably hard, because it almost defies human nature … but here it goes anyway 😉. Embrace the uncertainty, it rarely leads you to where you thought it would, but it can be a beautiful place. In financial planning terms this means being disciplined, managing your emotions, and staying goal-focused (any one of which can be hard, but I’m campaigning for you to practice all three, at all times).
I’m here to support you every step of the way, I know how hard it can be. But as I tell my kids all the time, “nothing worth accomplishing in life is easy.”
It’s a tremendous honor to serve and support you.
Make it a great week ahead.