The Wrong Field



Summer is here and like many Americans, we will flock to the beach at least once. Sunshine, sand, sunsets and some of the best people watching one could ask for. We are there to relax, let time pass and forget the stress and chaos that remains back at the office. The coast is a sacred area of solace. “Let’s go kick back and relax at the Atlanta airport” said no one, ever.


So we know what relaxes us. Gives us peace and tranquility. Possibly what allows us to level-set and think clearly. Knowing this, what is it that drives us, as investors, to laser in on CNBC’s squawk box or the digital ticker tape while the market ebbs and flows by the second. Knowing all too well that those ebbs and flows mean absolutely nothing when it comes to our long term investing goals? Is it our obsession over needing constant stimulation? A thirst for knowledge? Or maybe it’s our inner nerd’s version of FOMO?


For some who day trade, obviously there is value here. But for 99% of us, it is just a stress inducing slow motion car crash/high blood pressure inducing exercise. Yet we can’t look away. Ending the day with some empty satisfaction that we watched a soap opera that will pick right up the next morning. But, much like trying to play basketball on the football field or football on the golf course, we are playing the right sport on the wrong field.


Information is value, right? Yes. But, how much information do we need to make a logical decision before too much data sends us into an emotional “what if” spiral? Alvin Toffler, an author and futurist, coined the term, “Future Shock” to describe the damaging stress and confusion that the world brings upon individuals by subjecting them to too much change in too short of a time. Sound like the typical Tuesday? He actually wrote a book by the same name in 1970, long before the never-ending waterfall of news began filling our every minute. This information overload can create difficulty in understanding an issue that can interfere with decision-making. Sometimes referred to as “analysis paralysis.” More is not always better.


Long-term disciplined investing is slow, structured, and somewhat boring. The news and analysis that is valuable to managing our own portfolios is on more of a 6 month or yearly basis, not daily, weekly and especially not by the minute. So, other than the entertainment factor, spending endless minutes of your life and taxing your poor nervous system worrying about the fact that the 10 yr. treasury yield rose another 5bps or Amazon dropped 5% last week doesn’t seem like a healthy use of one of the 28,000ish days we get on this earth. But most of us are guilty.


Maybe it’s the satisfaction of those times where we get that prediction right and the bragging rights along the way. Or when you luck out and bump up your 401k contribution right before a market correction. That sliver of time that we feel we actually controlled something that is out of your control. It’s powerful. Much like the first time you drop a $20 bill into a slot machine and triple your money. It keeps us going.


But as much as we can get hung up on these small moments, we have to remind ourselves what game we are actually playing. In the recent book, The Psychology of Money, Morgan Housel used the example of playing the right sport on the wrong field. The sport being long term goals based investing. The field being that daily fire hydrant of info we all watch. And I’m not just picking on long term investors. Most day traders or crypto traders would likely be bored reading Vanguards economic outlook. I get it. It is how we are individually wired.


It is important to realize that we only have so much time and so much brain capacity. If our focus is dollar cost averaging, compound interest and BUILDING wealth, watching every twist and turn of the market isn’t necessarily adding much to the cause. Just adding to our anxiety, especially in turbulent markets.


So, as we get up each morning and welcome the new day, remind yourself of the game you are in and play on the right field. Your nerves and wallet with thank you.



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