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Many investors search continually for the ‘one sure thing’ that will improve their investing outcomes. Much like the snake oil peddled in bygone eras, this quest for a ‘magic elixir’ is usually counterproductive and unsuccessful.
Don’t Be Fooled – There Is No Quick Trick
The financial services landscape is littered with investment products that lay claim to some type of ‘secret sauce.’ Instead of looking for the one peculiar strategy that will change your financial life, focus on strategies that have proven successful over time.
If you dig into most hot investing ideas, you’ll find a common thread. Namely, the purveyors of these products want you to believe that they have some information that’s yet unknown to the rest of the investing world.
Here’s the truth…the amount of information that some investment firm, advisor, or broker has that others don’t is zero. Rather than concentrating on what’s working best today, aim for what’s worked best over the long-term.
Take a Deep Breath – Patience Is Key
I’ve seen dozens of individuals over the years hunt for investing short-cuts. It seems the further behind you are in saving toward your financial goals, the greater the chance you’ll try something to ‘speed up’ the process.
The biggest investing advantage, however, doesn’t come from some ‘special knowledge’, but rather from time. How long your money is invested is the key.
Patience is a significantly underrated investing skill. Allow time to work in your favor instead of working against you. Think about putting your portfolio into a mental drawer and only open the drawer occasionally. Remember, the central reason you’re investing is not for next month or even next year, but rather many years into the future.
In a number of ways, successful investing is counterintuitive. You may want to ‘speed up’ the process, but the most reliable way to accomplish your financial goals is to take it slow. Investing, like other things in life, has a natural rate.
Investing is one of the activities where trying harder, or going faster can actually backfire. You want better investing outcomes and to make up for lost ground, but relying on the ‘one sure thing’ is usually a mistake.
Don’t Let Your Fear Rule You
The broad economy and the financial markets inevitably go through cycles. Some ‘sure thing’ investment products attempt to smooth out these boom and bust cycles. Typically these strategies fail in the long-term because the lifecycle of fear and greed are the underpinnings of the investment markets.
If risk wasn’t a component of investing, you’d have no reason to expect good returns. Risk and uncertainty are at the core of investing. Try as you might, it’s a fool’s errand to think you can remove risk from the investing equation.
The important thing to know is that your feelings of financial insecurity likely won’t be solved by searching for the ‘one sure thing.’ Shift your focus toward saving more, investing for longer, and using long-term financial market history as your guide. These are all affirmative steps aimed at improving your financial future. Tune out the noise and turn down your emotions.
Related: Crafting a Framework for Sound Financial Decision-Making