“To be or not to be,” that was the question asked by Hamlet in that great Shakespearean play. Existence. Yours, mine, ours. That is a very loaded and thought-provoking question.
So, it should go without saying that a question like, “When to invest or not invest,” shouldn’t be as difficult of a question to answer. Especially in light of the expansiveness and weight of Hamlet’s six worded question.
The problem with asking the question above about investing lies in our behavior. In how we act and how we react. In what elicits excitement and what elicits fear. And how we often tend to react out of fear. Fear of losing. Fear of missing out.
And it’s not just fear. Pride also creeps in and distorts what and how we act and react. We think we know better than the person next to us. At the same time, we don’t want to be found out not knowing. Access to information can be overwhelming at times.
In his book, The Laws of Wealth, Dr. Daniel Crosby, Clinical Psychologist and Behavioral Finance Expert, talks about the risk that information can have on our investing and financial planning success.
He says, “Information risk is realized when incomplete, flawed, or misweighted data gives rise to decisions that are equally defective. Certainly, there can be factual mistakes in the information on which we make our decisions, but our focus here is the ways in which the human mind can contort even the cleanest data set. Given that data in abstraction is meaningless, the information we possess is only as “clean” as the process by which it is considered.”
Sorting Through Chaos
What is your process for considering the myriad of information that cascades toward you every day, especially in light of when and how you’re invested? How do you sort through the chaos and make sound investment decisions?
Christchurch, New Zealand