Intensity vs Consistency

Stumbling through Twitter, I came across a great quote from James Clear. The message is simple, easy to understand, and really fits with a lot of the messaging I try to get across for clients when it comes to their finances.

A pretty simple message but it can be applied to every part of our day. I told myself earlier this year that I was going to train to run a triathlon. Do I really need to do that? Or instead, should I be focusing on not missing a single day of exercise for the remainder of the year. Instead of a triathlon, should I do 200 5k’s?

Most people need consistency more than they need intensity

James clear

Think of this like training for a marathon or long distance race. You don’t start out immediately sprinting 6-7 minute miles. Instead, we have to get our body used to both aerobic and anaerobic training.

Aerobic training is lower heart rate training. You run at about 80% of your max. And the beauty here is its relatively low stress and makes you can feel like you can do this forever. It’s a slower pace but the consistency of training in your aerobic zone amplifies the rate at how far or long we can run.

Aerobic training also doesn’t seem like progress but it is. Sure, its not a sexy as sprinting your heart out past people on the trail but even the best runners on the planet focus heavily on these small steps.

Our elite marathoners typically run 85-90% of their training volume in the aerobic zone

Andrew Kastor, Head Coach of the Mammoth Track Club in Mammoth, California, US

The goal is to train small and let your body adapt to the continued punishment. The more you get comfortable with these periods of aerobic training, the better your performance will be when you need to kick into the anaerobic zone.

Too much time in the anaerobic zone without enough aerobic training will turn you into a hot mess limping across the finishing line…

Me getting crushed at the end of a Spartan Super

As I have been working to improve my conditioning and ability to run distances, I keep finding so many parallels to investing. Everyone focuses on the big wins, the home run stocks, or trying to win the lottery. Nobody enjoys putting in the work and focusing on the building blocks of building wealth.

..everyday progress, even a small win, can make all the difference…

Harvard Business Review

The consistency of regularly investing will vastly outperform the intensity of aiming your sights only on big wins. Forcing yourself to just continue to put money away has an immense outcome if you can be patient!

This idea of “retirement” or saving for a home, sometimes seems like eating an elephant. But everyone knows exactly how its done..

So, stop trying to focus on the home run hits and instead focus on regular consistent action!

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Boring Wealth

Nobody likes boring.

Boring people, boring conferences, boring sporting events, boring shows.

Boring sucks…

But… is boring what we need?

As a society, we have lost patience. Any kind of patience….

  • When the gas pump takes longer to put gas in the car
  • When our internet connect slows down
  • When a text message won’t send
  • When customer service tell us to hold for more than a minute

And as the technology age advances, the lag time in our decision making is almost completely eradicated…

  • Venmo lets us send money to anyone we want…instantly
  • Instagram lets us post anything about our lives…instantly
  • Twitter shares us the news from any part of the globe…instantly
  • And Robinhood lets us trade stocks…instantly

I could go on for hours with more examples of instant gratification we receive.

Now, all of those platforms have dramatically increased the quality of our lives but at the same time they are building in habits that are difficult to break. If you reread my post on making investing a habit, it takes almost 21 days to build a habit. And it takes longer to break a habit. So, how the heck are we going to be patient enough to let our investments grow?

In the investing world, we talk at nauseum about compound interest. Simply put, your investment earns money, reinvests that money, then the next round of earnings should have compounded on themselves. Here is a chart for those visual learners who already lost patience reading this article.

Source: Google Images

My point being, if we have instant access to do just about anything we want with our investments, how do we let compound interest do its thing? The key to compound interest is time and the amount we trade negatively impacts the amount of time we are compounding.

There are also millions of signs that investors are losing patience. Those signs are in the form of trading volumes which continue to grow out of control. Investors are trading at higher and higher volumes almost every year.

Source: CNBC

With boring investing, you really need to find quality companies to own for the long hall. If that’s too hard, find your favorite index fund and call it a day. There is a lot of wealth that can be generated outside of the sexy AI, machine learning, and biotech companies investors flocks towards. Sometimes a little bit of patience coupled with a great product is all investors need.

Take WD-40 for example. My guess is almost everyone reading this article didn’t even realize this was a public company. Also, probably everyone reading this article doesn’t know what the product they sell actually is. Most of us just think of “WD-40” the same way we think of Goo Gone, Velcro or Bubble Wrap. Its become a verb.

“I have no idea what I’m spraying on my door hinges but it works!”

Everyone owns the product but nobody knows what the heck it actually is. BUT, for those investors who spend the time sifting through the misinformation, an amazing investment has compounded on itself for over 30 years.

Source: Koyfin – WDFC

I know its boring.

We all know its boring.

But leave your investments alone and focus your instant gratification elsewhere.

Please ignore typo’s, I will be editing grammar as I go!
I have no positions in any securities discuss or plan to initiate positions in any securities discussed in the next 30 days.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Portfolio Addiction

I recently started reading Adam Alter’s book Irresistible. This book is a kind of a shell shocker on how technologies, like our iPhones and social media, are morphing into the methamphetamines of the 21st century. A bold statement but the more you read the book, the more you start to think to yourself “I might actually have a problem.”

Today, more than ever, we are so completely overloaded with information that it’s near impossible to stay focused on the important aspects of our lives. I can attest for this myself, in just the few minutes it took to write this article, my Apple Watch has sent me 5 alerts, I checked my e-mail a dozen times, and I keep staring off to check the market on CNBC. I also went to Amazon to find a URL for Adam’s book so there’s another distraction.

“…In 2000, Microsoft Canada reported that the average human had an attention span of twelve seconds; by 2013 that number had fallen to eight seconds. (According to Microsoft, a goldfish, by comparison, has an average attention span of nine seconds.)…” 

This makes perfect sense. Why does Google allow you to skip ads after 5 seconds? The answer, you don’t have the attention to listen much longer.

…Human attention is dwindling

Microsoft Canada

And this trend of diminished attentiveness is not going away anytime soon. The more technology is absorbed into our daily routines, the more we are doomed to NEED it.

It’s kind of ironic that Google will show me 294,000,000 results for “Internet Addiction” articles but zero results for any trends showing the growth of internet addiction.

Google Search – 294 Million Results
Google Trends – No Results

So this brings us back to your investments. With our brains only paying attention for maybe 7-8 seconds, how are we supposed to hold an investment strategy or plan a retirement for 20+ years? The world is becoming more and more complex for retirees and the reliance on the individual to provide for themselves is only growing.

As time passes, every bank, financial planner, investment firm or insurance agency is finding new digital ways to blast you to take action. You will never see an advertisement from any of these firms saying “just stick with your investments, you’re doing fine!” Instead, they tell you about making money quick, retiring early, avoiding losses and a mess of other nonsense.

And don’t think your financial advisor has immunity to this, honestly, they probably have it worse. I find myself having to step back from the ledge of stupid decision making all the time!

With that, I wanted to bring back a chart from my first post. This is a piece that JPMorgan put together that really helps break everything down.

I am perfectly fine with clients being hyper-attentive to their investments, and would never tell anyone to turn a blind eye to how they are invested. But WHERE we allocate the majority of our attention is where we are going to see the best results.

  • We have TOTAL CONTROL over our spending and savings strategies. 
  • We have TOTAL CONTROL over our asset allocation. 
  • We have SOME CONTROL over our health and employment. 
  • We have NO CONTROL over stock market gyrations, politics, tax changes, or impacts to social benefits.

Spending time on budgeting and taking an appropriate level of risk will nullify most of the noise the media blasts our way.

Focusing on our health through diet and exercise can potentially increase your longevity (longer retirement).

Bettering your employment through personal development, certification, and continuing education can improving your earnings and savings potential. 

What the market does on any given day, what any politician says, what CNBC just mentioned, or how your accounts performed relative to the S&P 500 are all useless. They have no direct bearing on your personal finances.

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

The Urge to Act

Patience - Lao Tzu.jpg

Meditation relies on sitting still, calming your mind, and drifting off into a deep relaxation. The goal is to allow ourselves to feel what’s happening in our body and clear the mind of what causes us stress.

Many medical professionals say that meditation is a great exercise for reducing stress, anxiety, and depression while increasing happiness, peace, and well-being. Sounds great, but one session will not do the trick. It takes time and dedication to see see the results of meditation.

But how do you get started? The first time I tried to meditate I could barely keep focused. Any noise around me had to be investigated which kept me from focusing. This image perfectly explains my first attempt at meditating.

Source: Giphy

Meditation takes time to get used to. Sitting in your chair, listening to someone talk about all peaceful things sounds great, but most beginners have a hard time of staying focused and lose track of what they are doing. An itch gets scratched, a noise gets investigated, and our tranquil mind is now gone. We find an urge to do something even while everything else is telling us to relax.

Similarly, with investing, the patience required to allow your investments to grow takes a lot of practice. It can be hard to put money to work simply to watch it sit there. Or worse, watching your money fall in value shortly after beginning your investment career. The process of compounding wealth takes substantial time, and allowing it to do so is even harder. Allowing yourself to do nothing in volatile periods is one of the hardest aspects of investing.

Focus - Carl Richards.PNG

Behavioral economists have a term called Hyperbolic Discounting. This is a really fancy way to say we prefer immediate gain instead of waiting for a long-term return on our investments.

Makes sense. If someone is going to give you $100 today or $1000 in 5 years, we naturally gravitate towards the short-term benefit of $100.

Today, more than ever, immediate rewards are sought after much more than any long-term benefits. With platforms like Robinhood, Betterment, and other “instant (and sometimes free) trading platforms”, investors can be inundated with short-termism. It has never been an easier time for someone to begin investing, but at the same time, it has never harder to stick with your investments. Like meditation, the best rewards are provided to those who can focus and stick with the process.

As investors, we need to try to understand how the market works and not be tricked into making short-term decisions. One main area of conditioning investors need to feel comfortable with is facing market volatility and down periods in the market. According to Ned Davis Research, the market drops 5% multiple times throughout the year and 20% or more every 3 years or so. AND THAT’S CONSIDERED NORMAL!

Market Declines.png

Source: Ned Davis Research

Market volatility happens and will continue to happen. As I mentioned in my last post, you are compensated for sticking with your investments through these volatile periods. If we jump in/out at every volatile point, we have almost no chance of succeeding with our investment strategies.

Ben Carlson, of Ritholtz Wealth Management, put together some great visuals to explain why to focus on the long-term.

We start with the yearly declines an investor would have faced in any given year while investing in a balanced portfolio:

Portfolio Drawdown 1965 - 2015

Source: A Wealth of Common Sense

Seeing a rather conservative investing strategy drop by 30% multiple times is kind of scary. Better yet, being able to stick with it through for decades is even harder. But if we can focus on the long-term, we see the compounding returns of that portfolio:

Portfolio Growth 1965 - 2015

Source: A Wealth of Common Sense

And this is where the benefit of investing lies. Being able to consistently save money and keep your investment strategy simple will do more your wealth than investors can imagine. The media’s focus on short-termism and the constant hype about trading, do little to nothing to benefit investors. Focusing on your personal balance sheet and allowing your investments time to grow is the best way to successfully invest for the future.

Please ignore typo’s, I will be editing grammar as I go!
Sources: Giphy, Ned Davis Research, A Wealth of Common Sense
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Stay Focused

Stay Focused

In the spirit of Halloween, Mr. Market decided to wake up October 1st and scare the crap out of everyone. October has been one of the most volatile markets in years and a lot of investors are worried that Mr. Market might have turned into Michael Myers…

Michael Myers Halloween GIF

Source: Giphy

This month has been a series of neverending scary market headlines. And rightfully so, there is a lot of news coming out this month that is really driving investors to rethink if they should be investing or not. If we just look at the past two days, the point changes in the Dow Jones are really quite remarkable.

  • On Wednesday, the Dow Jones Industrial Average fell more than 600 points.
  • On Thursday, the Dow Jones Industrial Average climbed more than 400 points.

When it comes to volatility, we have to focus on why we are in the markets in the first place. There is a reason your checking and savings accounts pay virtually nothing. That reason is the fact that you are insured and taking virtually no risk.

The stock market pays you to take risk.

This is the entire reason why we invest. The S&P 500 has grown by 9.65% annually since 1928. The cost you have to pay to receive these returns is to stick with your investments through the inevitable volatility. How you manage your behavior and emotions is DIRECTLY responsible for how your investments will do. Image from iOS (1)

Now, I sympathize completely with the concerns about losing money. Every investor has a different goal they are saving for and that makes it hard to fully understand how the markets make each of us feel.

However, investors need to focus their attention on the right aspects of their investments and financial planning or they will truly never achieve their goals. Stressing over the individual DAYS in the market is a fool’s errand.

Things You Control - Carl Richards

Where You SHOULD Focus Your Time:

  1. Ensuring you have a proper asset allocation
  2. Making sure you are invested in tax-efficient accounts/products
  3. Maintaining a budget
  4. Regularly saving
  5. Reading more of Jack’s blog
  6. Focusing on your career
Please ignore typo’s, I will be editing grammar as I go!
Sources: Giphy
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

The Downside of the Internet

Info Overload - Shirky

With the advent of the internet, the availability of almost anything you can think of is only seconds away. Whether it’s a recipe, directions, homes for sale, or a digital copy of the encyclopedia, you can pretty much find anything you’re looking for in a matter of seconds.

Social media, being part of this internet revolution, has been one of the most amazing components of this revolution. In one application, you are able to keep in touch with a massive network of friends, family, and co-workers like never before.

In what seems like an eternity ago, you once had to actually pick up the phone and schedule a time to meet. Now you can creep on someone’s social media feed and monitor their lives in real-time.

Why actually call someone when you can just check their Instagram and Facebook for all the questions you have?

The past few months I have been working hard to cut back my social media usage. As part of this process, I have deleted all social media apps (except Twitter), and access my profiles through the web. The more I tracked what I am spending my time following, the more I realize I am killing brain cells and wasting valuable time.

Along with the useless photos, videos, and news articles I’ve consumed, The Four work tirelessly to ensure we are fed sufficient advertisements to further steal your time.  Among “The Four”, it’s Facebook and Google that spend the most time attacking the rest of your spare time.

I would wager that Google and Facebook know more about you than your family does.

The 4 - Scott Galloway

With this detailed knowledge about your desires, wants, and dreams, they bombard you with wave after wave of products and services to hopefully convince you to make a purchase.

Now I could care less about the type of jeans Facebook convinces you to buy, I am instead concerned about the media, content, articles, and news outlets they think are relevant to you.

With this deep understanding of how your brain works, Google and Facebook send you an endless barrage of other (similar) content sources for you to consume. The overwhelming rush of media and news leads to an issue we have to keep an eye on.

This issue is what we call confirmation bias.

confirmation-bias (1)

Confirmation bias is essentially spending all of your time and energy only consuming content that agrees with your existing beliefs.


Source: Farnam Street

If we use the economy as an example, this can be seen quite easily.

Let’s assume you are concerned about an economic recession. A quick trip to Google or Facebook will land you right in the middle of a dozen writers concerned with the same thing.

Literally, searching the words “economic recession” in either of these platforms brings about the end of the world.

It’s scary but you can search just about anything and make it become true. Try searching your symptoms when your sick, or something about your political views, the platforms then fuel your confirmation bias to the point of no return.

My point with this article is simple and I’m going to repost the quote at the very top.

Info Overload - Shirky

Facebook, Google, and almost all media sources out there are simply yes men, aiming to agree with whatever the hell you want to think about that day. Your price for this agreement is that hopefully, you buy something from whoever bought the ad.

None of these platforms are in the business of economics, asset management, financial planning, or retirement. These media companies are paid on advertising dollars, so whoever pays the highest amount gets to determine what is seen the most. It is up to you to take the time to understand where your content is coming from and if it really affects your financial and investing decisions.

Nobody is going to control the amount of garbage floating around the web. Instead, we have to construct strong filters for rejecting bad content. Our goal is to make the best, unbiased, decisions we possibly can. So spend as much time as you can evaluating all of the facts, not just the ones that agree with you.

Please ignore typo’s, I will be editing grammar as I go!
Sources: Farnam Street, Scott Galloway, Google, Facebook
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Fitness & Finance

Excuses - Blair

What does it take to improve your health, wellness, and overall physique? The answer is to have a consistent exercise program and eat well. Diet and exercise, when used collectively, provide the greatest chance for you to see results. So what then will improve your financial health, wellness, and portfolio physique? Let’s discuss!

I’m going to reference a lot from The Power of Habit, which has an excellent chapter on Starbucks and their use of willpower in educational programs.

In the book, researchers at Case Western Reserve University tested the willpower of students by having them sit at a desk between two bowls. One bowl contained freshly baked cookies, while the other contained radishes. The test was to see if they forced one group to eat only cookies and the other group to eat only radishes, who would perform better at completing various puzzles.

Which group would you rather be?

What happened after the study (not shocking) was that the kids who ate cookies were relaxed, took their time to work on the puzzles, and seemed to be happy. While the kids forced to eat radishes were upset, frustrated, and stressed out.

By making people use a bit of their willpower to ignore cookies, we had put them into a state where they were willing to quit much faster


Just as it’s hard to avoid freshly baked cookies, it’s also hard holding onto your investment strategy during volatile markets. And like it’s hard to skip happy hour with your friends, it’s also hard to avoid the temptation to overspend. When we are constantly bombarded by things attacking our attention, it’s very hard to focus on making the best decisions for either our health or money.

As I write this piece, the internet is peppered with Amazon Prime Day ads, incentivizing customers to blow their entire paycheck on some new Alexa product. If you read my earlier article, Information Overload, I explained how the major technology firms attack your heart, brain, gut, and desire, and Prime Day is a perfect example.

Prime Day

Source: Amazon

Now, more than ever, the battle over consumers time and attention have never been greater. Marketing departments in every industry are working day and night to find the best way to steal your time. Finding time to stick to a workout routine or investment plan has never been more difficult.

So here are a few tips to hopefully keep you somewhat focused on the future:


You will not wake up tomorrow with six-pack abs, nor will you wake up with market-crushing investment returns. You can’t plan to win the lottery this weekend, just as you probably won’t correct a spending habit overnight.

It takes time and dedication for both your fitness and finances to see best results. Working out for only a few weeks seems useless but once your body begins to transform all the results are clear. This is exactly the same as allowing your portfolio an extended time period to grow. Extend your investment holding period out another 5+ years and watch the results.

Tree - Buffett.jpg


Personally, plateauing in fitness is way more painful than in your finances. When you have been diligently eating and hitting the gym each morning, seeing no results or improvement can be tough. This is where your mental state comes in and your willingness to work through it is key. Understanding how to navigate through a plateau is crucial towards your physical development.

The same thing is true with investing. THE STOCK MARKET DOESN’T ALWAYS GO UP!

homer simpson facepalm GIF

Source: GIPHY

Aswath Damadorian does a great job tracking annual stock market returns. If you double back on my expectations article you will see that it is very common to see a year with flat market returns. This is the equivalent of your workout plateau. Just chill out, hold your strategy and keep your contributions going. Your focus should be on your personal finances (debt & savings) anyways so don’t worry too much about yearly market returns.


Fitness and finances are lifestyle decisions. None of anything I have written will be useful if you don’t care about applying it.

If your plan is to go through life mindlessly, expecting your future to be taken care of for you, your an idiot. There are so many issues with entitlements, savings rates, 401k participation rates, and debt loads that people really have to make lifestyle decisions to correct their finances.

E-Trade does an amazing job with their marketing campaigns and this slogan of “don’t get mad, get E-Trade.” The thought here is to stop hoping your lottery winnings arrive soon and instead start building something yourself.

first class GIF by ADWEEK

Source: Giphy

You have to make lifestyle changes for best results in any exercise program. A lot of these same changes will fall over into your personal finances as well.

In The Power of Habit, radish/cookie test was expanded into a personal finance and exercise program. These programs eventually created almost a trickle-down improvement into each other category. You start working out, you make better meal decisions and avoid cheat meals/drinks. This reduction in cheat meals, fast food, and alcohol consumption actually improved the monthly savings rates of individuals studied.


Every time I step onto the tee box at a golf course, I mentally picture myself piping a drive down the center of the fairway. What happens next, is almost never a drive down the center of the fairway. This is part of the reason golf is such a mental game, you have to get out of your head if you want to be any good.

Hit & Think - Berra.jpg

It doesn’t matter which diet you found, what investment strategy you discover, or investment vehicle you want to buy. Nothing is going to get you fit or rich quick. They all require the same two things: persistence and patience.

Millions of cognitive biases (our brain playing tricks on us) end up convincing us that we need to go ahead and do something.

  • Let’s buy a stock after its run up 1000% because ABC News did a headline on it!
  • FOX just did a survey on a new diet with excellent results!
  • Joe, my barber, is making a killing off cryptocurrencies!

Nobody ever sells the downside of these schemes which is what you need to be paying attention to!

  • 1000% stock gain has dropped over 50% on 20+ occasions
  • FOX new diet was a sample size of 4 people
  • Joe, the cryptocurrency trader, was just lying to your face
Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Surviving Your Investments


I recently finished reading Deep Survival by Laurence Gonzales. It’s an excellent book that does a great job of evaluating how people make decisions and ultimately fail or succeed in remarkably challenging situations. These chaotic events are pretty insane. For example, Gonzales recounts the decisions made by a climber while basically falling off the side of a mountain.

In the book, Gonzales does a superb job relating how our brain acts in these stressful and strenuous situations, and where our reasoning goes wrong. Most “survivors” in these stories seem to share similar characteristics that help them overcome the struggles they were facing. I figured I would outline some themes I picked up from the book and how I see this related to everyday investing.

If we think big picture for a second, how survival relates to investing is quite simple. When we face difficult times, we tend to become blind to seemingly obvious actions and make decisions that seem irrational in hindsight. Everyone knows not to drink salt water but if you are stuck at sea for a week, you probably will forget.

Behavior Gap - Forest & Trees

We begin to focus way too intently on the trees and ignore the fact we need to remember it is a part of the entire forest. As with drinking salt water, we forget about the big picture of needing to make smart survival decisions. Just as we might abandon our investment process after a few bad days.

As investors, we need to make sure our decisions are matching our future goals. We cannot let one specific day of volatility (tree) take our eye off retirement, college savings, a new home or whatever our goal (forest) is. We have to maintain our ability to step back and double check our work. Our goal should be to make sure that we can see the forest for the trees, and not lose our perspective in any particular situation.

Traditional economics assumed perfectly rational agents. So does traditional survival training. Neither assumptions reflect the messy real world.

I love this quote by Gonzales as it really emphasizes this point:

Swindoll - 90.10.jpg

You will never have a simple, easy investing career. Shit happens sometimes we need to take a breather and recollect our thoughts. Don’t quit or give up when things happen but instead evaluate your surroundings and make the next move.

Investors tend to anchor their thoughts around economic forecasts, market predictions, and other historical stock market events.  These are good starting points but we have to remember they are measures of what has happened in the past. To quote Mark Twain, “History doesn’t repeat itself but it often rhymes.”

It is inevitable that we are going to see something happen in the markets, like volatilitybut maybe to a greater magnitude. This doesn’t mean to scrap our entire process or change what you are doing but instead to revisit our own process. We cannot let ourselves excess over one data point and become blind to other indicators available to us.

Just as with survival, nothing ever tends to play out as it does in training class. Very often these survivors get caught improvising and making adjustments based upon the experiences laid in front of them. As technology advances, information is more easily accessed, more investors enter the market, new challenging situations will be inevitable. It’s up to us as investors to evaluate what’s going on, make smart decisions AND SURVIVE.

Seeing the trees (February 5th, 2018):

dow feb 5


Seeing the forest (1980-2018):


Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Stop Chasing Returns

Buffett Quotes - Emotions.jpg

What is it about human behavior that has us all chasing the newest, shiniest investment that comes our way? Each and every year some new topic has the markets all excited and people rush out the door to figure out how they can take advantage of it. But the thing we have to try to focus on is what SHOULD we be chasing with our time, attention, and money.

Let’s look back to the theme for 2017: Bitcoin & Cryptocurrencies

Last year, people went nuts at the first sign of Bitcoin’s price skyrocketing. Without understanding what Bitcoin actually is, how cryptocurrencies work, or even what to do with a Bitcoin, billions of dollars continued to rush in.


The price of Bitcoin climbed more than 1,000% during 2017 and led every news outlet on the planet to allocate at least a few hours discussing the topic. Immediately your plumber, barista, mechanic, and attorney were all cryptocurrency experts and you were the idiot.

So, what exactly happened?

My guess… the FOMO got a little out of control.


Source: The Interwine Group

In the end, most global markets became volatile at the start of 2018, and so did the price of Bitcoin and other cryptocurrencies.


If we look at the Google Trends over the past year, as soon as the market volatility picked up and the price of most cryptocurrencies plummeted, consumer interest flatlined.


Source: Google Trends

If we run this scenario over and over again, there are dozens of other topics the average investor will chase. From international stocks to real estate, we could swap Bitcoin with any other asset class and see similar results in some prior year. We are consumed by the FOMO and seeing others make great returns, so we instinctively chase after whatever seems to be doing well.

So, thank you to Meb Faber for finally putting together this simple and elegant overview of where investors SHOULD be focusing their time.

Meb's Food Pyramid of Investing.jpg

If you take a look at Meb’s Investing Pyramid, we see the core of any financial plan should be focusing on emergency cash and paying off your debt. If you’re making 15% annual investment returns but paying 20% credit card interest, you’re going nowhere. You need a strong foundation to build a home and with investing that starts with a strong personal balance sheet.

Investments should be one of the LAST areas an investor should be spending their time and energy. If you think you have a real edge against the millions of investment professionals and computer algorithms across the globe, you are in for a rude awakening.

Focusing on the basics of personal finance, budgeting, and simple financial planning will vastly improve the outcomes of investors instead of grabbing an extra few percentage points of returns in your 401k.

With personal finance comes personal development. Continuing your education, completing certifications, excelling at your job, improving your well being and community involvement. All of these areas will provide stronger personal and professional returns than trying to focus on your investments to make up the difference.

Invest in Yourself Buffett - VC.PNG

Source: Visual Capitalist

Stop focusing so much on the small minute details like your annualized investment returns and instead focus on how to improve yourself and your household finances. Beating the market in 2018 will do almost nothing towards your retirement. Instead, pay off a few extra bills, advance your mortgage payments, or consider contributing more to your tax-advantaged accounts.

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Status Quo Bias

Quit Talking - Disney.jpg

The inability to take action is one cognitive issue investors face. This “everything is alright” mentality defers our attention away from our investing and we focus on more interesting things (Netflix, shopping, etc.).

Understanding that we are neglecting our future selves will help us focus on making correct steps today to improve in the future. Without any action, we are blindly moving ahead with no real idea on how best to achieve our long-term goals. Ignoring the status quo bias will help us create the building blocks for an improved future.

Think about it like preventative medicine. If you are taking steps each and every year to ensure your health is in order, the likelihood of a major health issue can be greatly reduced. If you are regularly testing your blood, eating well, and exercising, there is a good chance your doctor will see and adjust your behavior to prevent any major health issues.

But if you spend no time monitoring your health and checking in on yourself, what is it going to take to get your full attention to making sure you are in fact healthy? How do you actually know if your healthy and not at risk of some disease?

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The same is true in personal finance and our investing habits. America is struggling in the category of financial literacy and it really requires creating good habits to get us on track. How we manage our credit card and student loan debt, begin saving for the future, and choose our investments all to have a major impact on our future.

If we look at the current state of retirement in American, we can see the evidence:



Your goal as an investor and future retiree is to make sure you are taking the right steps towards bettering your future. You can’t rely on others to cover your living expenses in retirement but sadly 63% of rich kid’s expect to retire off an inheritance.

The last thing you want to do is sit around and wait for the financial equivalent of a heart attack to start planning. Instead, begin taking small steps to organize your debt, your savings, and your retirement. Don’t become a statistic from the EPI survey I referenced above. Start by ignoring the “status quo bias” and instead take some action.

Here are some helpful tips to take some action:

Aggregate your finances. I use to organize my savings, investments, and debts to make sure I can monitor my entire net worth each month. Having everything visible in a single spot can help you keep up with all areas of your net worth.

Learn about your finances. There are a ton of free websites to get good content about investing, savings, debt management, etc. I really like Khan Academy for understanding general personal finance. Also, most investment shops provide quality free tools and resources.

Setup a review schedule. This is probably one of the main reasons to hire a financial advisor. If you have no plan to monitor and review your investments, delegate the responsibility to someone else. Everyone has a smartphone with a calendar nowadays, so set up a recurring reminder shouldn’t be difficult.

Don’t think you suffer from the Status Quo Bias? Try to quickly answer the following questions:

  1. What funds (exactly) is your 401k invested in?
  2. What company handles your 401k?
  3. When was the last time you ran a budget?
  4. How much (exactly) are you saving each month?
  5. How much do your investments cost? (Nothing is free, not even index funds)

These are pretty simple questions but if you hesitate to answer them, you probably haven’t spent enough time looking into them.

Please ignore typo’s, I will be editing grammar as I go!
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