By Anthony Rhodes
If you
pay close attention to the rhythms of life, certain truisms will
begin to reveal themselves to you. I’ve noticed, for example, that
Allen Watts’ assertion that just about all human beings fall within
the categories of being either farmers or hunters (both personality
types accomplish the same ends, but uses different methods to achieve
them) to be both succinct and reliable, that a careful observation of
the show “Jeopardy!” reveals that the difference between the
brilliant and the intelligent is actually wider than that
which separates the average from the intelligent, and perhaps most
useful of all, that matters of importance are best decided after
periods of diligent contemplation, in stark contrast to immediate or
impromptu reactions. These anecdotes, and others like them, has
served me well throughout the years, as I’ve sought to gain a
greater understanding of life’s repetitive patterns. But of the
three mentioned, one would easily conclude the final observation to
be most recognizable by others, and therefore, most commonly put into
use. Yet, amazingly, certain conditions can magically cause this
assumption to dissipate into thin air.
One such
condition occurs when we’ve taken the time to develop investment
strategies for our portfolio, but shortly thereafter, with little, if
any movement taking place amongst our investments, tweak them, for no
plausible or evidence-based reasons why. Maybe we monitor our
investments too frequently, or our expectations are a bit high, but
whatever the rationale, this “three day itch”, as I call it, has
been known to wreak havoc over many investment portfolios, and for
some, unfortunately, to the point of no return (pun intended).
Nothing is Something
Creating
a successful portfolio strategy is not an easy undertaking, so, I
fully understand why some investors might find themselves anxious
after developing one. When designed and deployed, newly minted
investors may like to rapidly experience the fruits of their labor,
and might unwisely expect such results to arrive sooner, rather than
later. This belief is the basis for the “itch”, and primarily
drives such investors to feel as if they must do...something, after a
couple of days of immobility from their investments. If you find
yourself in this position, simply remember that investing is a
process, with time being your greatest ally, and that by not
doing anything at all, you may actually be doing what’s best for
your portfolio.
Strategy By Proxy
That being said, if you find yourself feeling anxious days after designing your investment strategy, it may also be a sign that your plan may be inadequate, and that deep down, you already know it. Those who have weighed the pros and cons of their strategy before its implementation, are more positive regarding its deployment, and this confidence causes them to less likely feel “itchy”upon the initial stages of its usage. I created How To Invest to guide new investors into becoming more comfortable and competent regarding their investment decisions. But, admittedly, some aspects of this process is best handled by professionals, and this area certainly qualifies as one of them. If you can’t get over this inclination to examine and re-examine your portfolio strategy, it may be best to seek advice from a professional. Our experiences in dealing with these issues should provide you with a certain degree of confidence, which you may not be able to achieve on your own.
There are very few historical examples in which reactionary impulses triumphed over contemplative reasoning. And within these rarities, a general consensus would conclude that luck played a more important role in the eventual outcome, than did the haphazard decision, itself. The reasons for these anomalies is simply because history has correctly deemed that exercises of thought best prepares us for life in a universe filled with complexity. As this lesson translates to our investments: the most successful strategies are those which have undoubtedly arrived through careful and considerate rumination, while their opposites have routinely been reliant on chance and fortuity to achieve the same results.
(Anthony Rhodes is the President and owner of wealth management firm The Planning Perspective www.theplanningperspective.com. Do not reproduce without permission. )
There are very few historical examples in which reactionary impulses triumphed over contemplative reasoning. And within these rarities, a general consensus would conclude that luck played a more important role in the eventual outcome, than did the haphazard decision, itself. The reasons for these anomalies is simply because history has correctly deemed that exercises of thought best prepares us for life in a universe filled with complexity. As this lesson translates to our investments: the most successful strategies are those which have undoubtedly arrived through careful and considerate rumination, while their opposites have routinely been reliant on chance and fortuity to achieve the same results.
(Anthony Rhodes is the President and owner of wealth management firm The Planning Perspective www.theplanningperspective.com. Do not reproduce without permission. )
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