Boring, but Irrelevant?
The other day someone challenged my wisdom, or at least what I was proposing, and declared it to be irrelevant to young people – those under 45. Maybe because what I believe in, whether regarding my Christian faith or money, isn’t exciting and it seems that if something’s not new and exciting, it’s often deemed irrelevant.
Let’s start here…
Money is derived in three ways:
- We earn it
- It’s gifted to us
- It’s stolen or acquired illegally
And we have four choices for our money:
- Invest
- Save
- Spend
- Give it away
If you disagree, let me know. See, many people believe that what is relevant is not what we already know to be true, but what is the latest news spot, the next hot tip, the talking head on TV. Exciting? Yes. Relevant to your financial success? No.
Most coming into the brokerage world are trained to create a story about how they are going to help you outsmart, out time, and out pick the market. The reality is…no one knows what the market will do tomorrow; no one knows what specific security will be the best tomorrow, and whatever turns out to be the best tomorrow has no correlation to what was the best yesterday.
Yet our whole culture is about outsmarting the market. It is about gambling with our future, our wealth, and our family’s future. Is that what is relevant? If it is, I’m willing to be irrelevant! I know it’s not sexy if I talk about the boring and the mundane pieces of financial planning. Being systematic, unemotional and diversified, investing in equities that are well diversified in asset classes that are defined by research, consistently rebalancing, and selling what is high and buying what is low is what I believe is relevant to helping you achieve financial success.
The rock of consistency which comes from being systematic, unemotional and diversified compared to the sand of picking, timing and trying to outsmart is much like the biblical story of building your house on the sand of the beach rather than on the rock of the shore.
Wisdom comes from years…. decades of living life and watching us as emotional animals do what feels good and sounds exciting, but in large could lead to disaster. If you want the truth, knowledge that can help you work towards success, then I hope you listen to these relevant words of wisdom.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing involves risk including potential loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
