If you happen upon my site or even my twitter account, you’d probably notice that I don’t really talk about investing all that much.
The truth is that while I am fascinated by investing, I just don’t have to think about it much.
I created a financial plan late last year, and I am sticking to it.
And this is the beauty of investing in Low-Cost Index Funds.
Your funds do all of the heavy lifting for you, and there is no day-to-day activity.
Sure occasionally I will write about personal finance and investing… roughly 20% of my content so far has been financial related.
I just choose NOT to get pulled into all the day-to-day stress, drama, and overreacting that is the stock market.
We want the beer, not the foam and fluff
This is where a lot of us often get it wrong. Not only in investing, but in life…we are drawn into the drama.
If you watch the news, it is always dramatic and urgent. This crisis is happening here, that issue is happening there.
But the reality is that 99.999% of the time, all of the dramatic, urgent, and timely drama is nothing more than foam and fluff.
And like JL says, we want the beer!
The Amplification of Social Media
And these days, most of what we have going on day-to-day not only investing, but in our lives is nothing more than that foam and fluff that we really don’t want.
Social media has amplified this for us in every way:
- The stock market has a pullback –> “Stocks are on sale”
- The stock market reaches all-time high –> “Just wait, the crash is coming”
- Bitcoin crashes –> “It was a bubble”
- Inflation –> “Don’t hold cash, it’s eating you alive!”
And these are just a few of the themes of the last year.
But literally none of it matters. It isn’t the beer!
When do you need your money anyway? Zoom out!
When you are investing, you are investing towards a future goal – retirement, generational wealth, or more flexibility in your future life.
Even if you are living off of your investments, at that point you are living off of 4% of less, so you’ll never actually need a majority of your money at any one time.
And yet, we all continue to get sucked into the drama.
The solution is pretty simple.
As Jesse @ The Best Interest says, “When in doubt, Zoom out!”
When you look at that chart of the stock market over the course of 40 years (most of our time horizons), we are seeing nothing but spectacular returns
Day-to-day, month-to-month, and even over one year, you can see all sorts of volatility.
The further you zoom out, the more you see that it all is really is all fluff and nonsense
The average investor will win by doing nothing, but by being invested as long as possible. That. Is. It.
I don’t talk about investing much, because I don’t want to work myself up over the daily drama, worry myself over picking the right stock, or anything else.
While I do have some active investments, such as the website I just purchased, I still prefer to have the rest of my portfolio sitting around in good old fashion Low-Cost Index Funds.
I don’t want to be thinking about my investments much.
I don’t want to be talking about them.
I don’t want to get wrapped up in the drama.
And, I can’t afford to be a bad investor.
That is why I settle for the “average” returns of Index Funds.
Over a 40 year time horizon…I’ll take my returns any day of the week.