This week was supposed to be the third installment of common financial fallacies. But because of both micro and macro events, I wanted to call an audible and instead provide two reminders. Both of which are a gentle lesson to myself, and hopefully to you as well.
First - we live in an unpredictable world.
Please point me to a market forecaster who called last week’s market bloodbath followed by this week’s best performance since April. And while plenty of people guessed that at this point we still wouldn’t know who our next President is, not many predicted the results of the House and Senate. Life is unpredictable, and we need to be able to roll with the punches. Which is a great segway into my next reminder.
Second - focus on the right things.
Specifically, we need to focus on the areas of life that we have control of and which overlap with the areas that actually matter. I’m talking about personal relationships, our physical and mental health, our savings rate and asset allocation, our cash flow and emergency funds, our news and social mental intake. I’m NOT talking about short term market fluctuations, election results, economic metrics, and your uncle’s take on politics.
It’s simple enough advice, but it’s so hard to be seduced into forgetting it and applying it to our lives. It’s probably always a helpful reminder, and maybe especially this week.
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Interesting Resources
Quote
Morgan Housel (The Psychology of Money)
"The ceiling of social comparison is so high that virtually no one will ever hit it. Which means it's a battle that can never be won, or that the only way to win is to not fight to begin with - to accept that you might have enough, even if it's less than those around you."
Amazing Grace by Pentatonix
5 min video | YouTube
A beautiful rendition of a classic and timeless song of truth. When you're feeling overwhelmed at some point, carve out 5 minutes, close your eyes and just be encouraged.
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We'll return next week with our third and final piece on financial fallacies - and until then, remember the two truths above.
Gratefully,
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