Is Facebook Hurting Your Investments?

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Life is Messy And So Is Investing

Everybody’s life is perfect and happy. All the evidence you need is available on Facebook. What Facebook has done is create a platform for everyone’s highlight reel.

facebook perfect life

You only want to show the best parts of your life? Great. Facebook is for you. You only want to show how awesome you are? Great. Facebook is for you.

People think everyone’s having this amazing life and they’re amazing parents and amazing spouses and amazing athletes. And amazing everything.

But really, life is messy.

life is messy

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When People Don’t Know What to Do They Often Do Nothing

I never have the exact idea that I want to communicate to you each week when I start my video. The idea is kind of messy in my head. And in the distant past this meant I would do nothing.

I’ve found that when people don’t know what to do or they have so many things they could do, they end up doing nothing and staying quiet. The quiet person in a marriage is often the one that has the most to say but they say nothing because there’s so much they want to say and they don’t know how to get it all out.

I get it.

Because I’m often that person in my marriage I’m the one who is the one that has so much to say but I don’t say it. Why? Because I want to say it “right.” I’m waiting to say it perfectly. And we all know how that works out.

I may be quiet but I have lots on my mind

Certainty Hurts Your Investments

What I’ve found that works in investing is to move forward without certainty. It feels scary but waiting means staying on the sidelines…possibly for years.

The problem is humans have been taught that certainty is life. The human only wants to move forward when absolutely certain. The thing is, certainty is only needed on the plains of Africa 10,000 years ago. Most things today move forward because there’s an absence of certainty.  

Waiting is Destroying People’s Investments.

When you wait you’re waiting for the market to get cut in half. Said more clearly, these people are waiting for the market to do what they “need” it do. And eight years later, they are still waiting in US Dollars or Euros or Yen or Yuan for the market to bend to their narrative of the world.

But inflation is not sitting. Healthcare is not sitting. Education costs are sitting. Life costs are not sitting. So even if that person’s million dollars sitting in cash, still looks like a million dollars eight years later. It buys a heck of a lot less health care, education and peace of mind.

Inflation Med and EDU

Please understand. I’m not writing this to shame anyone. I’m writing this to help people start to move forward.

Doing Nothing or Doing Too Much

But it’s not the money in cash that’s hurting their future. It’s that they have so much to talk about and so many feelings to work through and so much they need to figure out that they’re doing nothing. The opposite of course is often worse.

That’s the person that is having the same experience but they are doing everything. They are trading. They are buying options.  They are buying $3,000 investment newsletters. They are out of control.

This “everything or nothing” approach to investing can often be seen the brightest in the gold market.

Before You Back Up the Truck

What I’ve notice is that people act strangely with gold. They back up their truck, and their neighbor’s truck, and the neighborhood’s truck, and the town’s truck when they think gold’s going higher.  

Back up the truck

They’re looking for the grand slam in the 9th inning experience. I bring this up because gold is bottoming and maybe has even bottomed. And this is garnering a lot of attention. So, listen up. If gold has in fact bottomed and is in fact going to $5,000 or $10,000 it’s not going straight up. You. We. Me all have time.

But here’s one of the best questions you can ever ask yourself. And not just about gold. But about all investments.

Is the price agreeing with you? Is the price of the stock market agreeing with your beliefs that you should be in the S&P500?

Are you in gold? Does the price of gold agree with you? Are in the energy sector? Does the price direction of the energy sector agree with your opinion that you should be long?

Gold is Bottoming

What’s more important for your money: The price chart agreeing with your belief about it? Or that well written narrative about it? Here’s the best part. You get to choose what you want to align your money to.  The story or the price.

Do the “Money Shows” or The Price Agree with You?

There are lots of nuances to price charts (length, frequency, presentation). And my point to the investor is, look to a price chart and ask, is the price agreeing?

SP500 Steady uptrend

Or is it just blogs, and news shows, and money shows and the noise machine that’s agreeing with you? Which one is agreeing with your investments? This stuff matters and no one is talking about it.

Does price agree with you?

By asking yourself this question you force yourself to upgrade your thinking. To move your thinking away from 1970’s ideas like “don’t put all your eggs in one basket” and upgrading it to aligning with the markets.

By the way, “don’t put all your eggs in one basket” was an idea that was true BEFORE index funds.

In Your Corner,

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RC Peck, CFP

 

 

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