A recent dining experience with my wife and close friends reminded me why investing can be frustrating. I know it’s an unlikely setting for an investment revelation, but work tends to come home with you––especially during years like this in the market. The lesson lies somewhere at the intersection of control and instant gratification.
Our friend that coordinated the dinner is a bit of a “foodie.” That’s a great friend to have, right? One who’s happy researching restaurants, reading reviews, and hunting down reservations. For this night out on the town, she identified an establishment that fit her criteria: new, vibrant, with an eclectic menu, etc. All winners in our books, and we were excited to try it.
Sadly, the cuisine disappointed us for reasons I won’t bore you with, and the experience was unfortunate. Here’s why.
Our friend put time and effort into something that ultimately fell short of expectations. She did everything in her power to find a restaurant we would enjoy. Yet we were let down by circumstances outside of our control. This reminded me of the disappointment we feel when despite our best efforts to make informed decisions, it can lead to a less-than-favorable outcome.
As individuals, we strive to maintain control over our lives as much as possible. Financial ventures are no different. And then there’s instant gratification; it has become commonplace in our society, given the abundance of information, choice, and prosperity at our fingertips.
The results of the decisions we try to control––like having a Yelp-worthy dinner––then shifting away from our expectations are uncomfortable. We’re conditioned to expect immediate gratification given the plethora of information available to us when facing decisions. In reality, we know outcomes don’t always work this way.
Frustration over an investment decision is amplified as success is measured in years, not hours or months. Satisfaction is often delayed and follows a whole lot of disappointment in the interim. Investing is hard because process and research are always followed by the unknown.
Usually, we quickly overcome daily decisions that don’t immediately work out in our favor. Another attempt at an epic dinner experience is often just around the corner. Unfortunately for investors, patience and resolve are the best combatants for events temporarily moving expectations outside our control.
It’s essential to remember that your investment decisions won’t always be instantly rewarded. Investing aims to give ourselves the best probability for success over time throughout market cycles.
In the end, immediacy rarely serves an investor well, as long-term commitments often pay out as uncertainty eventually gives way to opportunity. This year reminds investors that in these moments of discomfort and uncertainty, ultimate relief and reward await those who remain committed to a disciplined investment process.
*Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing includes risks, including fluctuating prices and loss of principal.