Great essay James, always excited to see a new piece from you in my inbox. I’ve read a lot on investing - from Graham to Buffett to Lynch to Malkiel - and your ability to describe complex financial topics in simple, easy to understand ways is on par.
Reading this, I found myself thinking of the parallels of the Hero’s Journey. Not identical, but the hero being reluctant to set out on the Road, meeting unexpected friends and foes, riding through highs and lows, euphoria and despair and several moments they want to quit and turn back but realize they cannot or else they’ll never become the person they want to be.
Tommy, that means a lot coming from you. Thank you. And yes, I think the Hero's Journey is a perfect metaphor. Like remaining connected to the compounding, which is an act of faith in the unknown, the Hero must remain connected to his/her journey despite the circumstances. Or maybe it's not despite but surrendering to the circumstances and being forged from the periods of discomfort, manifesting into the fullest version of themselves.
An excellent reminder! Do you remember our conversation in 216 before the Clinton/Trump election? I remember sitting in my home office talking with you about my market concerns with the upcoming election. You gave me the same advice as in this post, albeit without the pretty charts. I took your advice to heart and have followed it ever since. I will continue to hold the course and if there is a correction before or after this upcoming election, will consider it an opportunity for dollar-cost averaging. Your thoughtful knowledge-sharing has been integral in the success of my retirement investment strategy. Thank you for that, and for today’s reminder!
Oops, realized I had the wrong election. Think it was the Clinton/Trump election of 2016. How the years fly by and start to run together in my mind. Either way, the appreciation for your help getting through the uncertainty of each election still applies. Thank you!
Loys! I do remember it, and like you didn’t remember exactly which election. As you point out, the answer is the same every time. You’re so welcome and I’m so pleased for you that you’ve been able to remain calm and let the thirty million people working for the S&P 500 companies create new products and services while increasing earnings over time. I’m always here if you would like to talk again. :)
A thoughtful, well crafted exposition on creating investment success. Sadly, and all too often fear and greed drive our money decisions. Your clients are fortunate, James, having you to guide them with firm kindness throughout the past several months, saving them millions of compounded dollars, returns they will fortunately see due to your steady hand. Great article!!!
Rob - as usual - so great to see your name here. Thank you for reading and for commenting. Yes, investment success is directly proportional to quieting our own ego, and our fears, and letting ingenuity work through time. We humans aren’t wired this way so it’s hard. Something at some time, gets under our skin and we need to sit chilly and not react. :)
Again, thank you and great connecting with you here.
What an utterly convincing and understandable articulation of how investing works. And the parallels to the meaning of relationships and deep connections is the cherry on top.
Thank you Rick - yes, I think the S&P500 has almost 30 million people working in those 500 companies, creating value through time, while new companies enter and others exit. It’s amazing that anyone can own that ingenuity at almost no cost through an index fund.
Thank you for reading Rick and for commenting. This one was harder for me, because of the #’s and statistics. I find it’s a bit easier to write about non-heady stuff.
But I think this is where you really shine James, being able to integrate the numbers and the human stuff with such skill and help those of us without a numbers orientation make easy sense of the financial world. I'm going to be nudging you for a book.
James, this essay flows like the majestic line it celebrates—steady, insightful, and quietly profound. Reading it, I couldn’t help but think about a time I sold out of an investment during a market dip, convinced I’d outsmart the chaos—turns out, the chaos was smarter than me.
Your Met analogy is brilliant; it reframes the market’s jagged ups and downs as brushstrokes in a masterpiece that only patience can unveil.
What do you think tempts most people off course. is it fear, ego, or the seductive thrill of doing something?
Also, I love the nod to investing as a self-portrait. it's poetic, humbling, and just enough to keep me from checking my portfolio tonight
Kuriakin, thank you so much for reading and commenting. Your writing is so fluid - and I loved the line that you were convinced you could outsmart the chaos, but the chaos outsmarted you. Your question is a GREAT one. Being in the business for almost 20 years, I think what tempts most people is fear - because when markets are going down, all people want the pain to stop. Especially when the $ value of loss gets bigger. I've also discovered that women are better investors than men because their egos are less active. I've never met a woman, who is tempted by their ego to outguess or outsmart the market. Because of that, they just need to manage their fears.
Thank you again and I look forward to exploring your essays too
Money volatility amplifies our emotions in both directions of greed and fear. If you look too closely it can drive a person to do something rash.
Lucky for me that I learned a painful market lesson early in life. First doubling my initial investment over 6mth, but then wiping out 93% in one night. Lesson learned- Trading is not investment it’s a bet.
Now everything is *invested for longevity* in index.
Randall, thanks for reading - I have your new post to get to this weekend. I'm looking forward to it. You said it very well - amplifies our emotions in both directions. I too, learned this lesson and may write a short essay on it at some point. One thing I've discovered from serving 250 households, is that everyone has SOMETHING that will get under their skin, and no one has anything even close to a perfect investing track record, except Rip Van Winkle - if he invested in the S&P prior to going to sleep. :) People can do pretty well and reach their goals if they employ a good philosophy and stick with it most of the time.
So much wisdom here! I love the different ways you show that the market generally rises and it's wise to stay the course. Your illustrations, especially around the presidents, were really profound. Clearly you are a great financial advisor for your people!
Serena, I appreciate your comments. 🙏. And I’m grateful you stuck with it. I wanted to figure out a way to start the piece with more of a hook but in the end I started it with statistics. And hoped readers wouldn’t tune out early 😳.
I found the metaphor of the art museum to be ironically interesting in this context. From direct experience with the boards of not-for-profits, especially arts organizations, I can tell you that many are notorious for failing to heed the advice that you have so well laid out.
All too often it comes down to a few board members losing a sense of risk vs reward, or worse, the "I know a guy syndrome", where they turn the money over to a flashy advisor who swings for the fences.
During the mid 2000s recession and market decline there were a number of arts organizations in NYC that pulled their money out of the market at the bottom and suffered permanent financial impairment as a result, failing to meet their long-term objectives and falling way behind their peers.
Drake—Double Ugh. I recall reading about entities like the arts board you refer to. It can be so very heard, especially for those who are "volunteering" on investment committees. I serve on a few investment committees, and with one of them, they did the same thing - had "the guy" who was a friend of a member in the 2008/2009 downturn, who didn't pull the money, but thought Washington Mutual was a screaming buy when the dividend hit 15%. Triple Ugh.
Thanks for the excellent perspective here. See you in WOP - I had to miss last night but will be out there tomorrow.
It is amazing how much of successful investing comes down to staying the course. Jason Zweig wrote in the Wall Street Journal a few weeks ago that most retail investors in index funds underperform the funds themselves. Why? Investors trade in and out of them, realize their losses, and miss the gains.
I have a neighbor in his early 90s who absolutely loves his financial advisor. From what I can tell, the advisor mostly just convinces him to stay in the market and not to trade based on whims and perceived geopolitical problems. My neighbor credits this advisor with making his current very comfortable lifestyle possible.
Einstein (yes, that Einstein) once wrote that compound interest was one of the most powerful forces in the world.
I'm like your neighbor's "guy"! We keep people in their seats, we try and convince them to invest long-term dollars as they become available - rather than holding them and trying to time their way into the market. But Drake, what we do a lot of is focus on all the other elements of a client's plan - from deferred comp elections, tax-loss harvesting, ensuring asset location is optimized, etc. Most of the incremental value created is through all the planning activities while keeping the investing activities intact.
And for Einstein - didn't he call it the 8th wonder of the world?
Drake - I appreciate your perspective as I expressed on your other note.
Another great essay James and a wonderful ode to the 'art' of investing. "Your investment portfolio is more than just a collection of assets—it is a self-portrait of hard work, saving, disciplined investing, and emotional fortitude in navigating market cycles."
This shows your range as a writer. From the personal, reflective, endearing, heartfelt pieces you’ve written before to this essay, which is more technical, business savvy and big picture. Cool to see you shift so easily between the two modes.
John, I appreciate your thoughtfulness. Isn’t it funny when we write, how a key sentence or two, the shiny dime of you will, shows up at the 11th hour and 58th minute? That passage just flowed out late in my process and it was perfect to tie things together.
Gonna revert back to a non investment topic next 😊.
Great essay James, always excited to see a new piece from you in my inbox. I’ve read a lot on investing - from Graham to Buffett to Lynch to Malkiel - and your ability to describe complex financial topics in simple, easy to understand ways is on par.
Reading this, I found myself thinking of the parallels of the Hero’s Journey. Not identical, but the hero being reluctant to set out on the Road, meeting unexpected friends and foes, riding through highs and lows, euphoria and despair and several moments they want to quit and turn back but realize they cannot or else they’ll never become the person they want to be.
Tommy, that means a lot coming from you. Thank you. And yes, I think the Hero's Journey is a perfect metaphor. Like remaining connected to the compounding, which is an act of faith in the unknown, the Hero must remain connected to his/her journey despite the circumstances. Or maybe it's not despite but surrendering to the circumstances and being forged from the periods of discomfort, manifesting into the fullest version of themselves.
I hope your work in central Canada is going well!
Dear James,
An excellent reminder! Do you remember our conversation in 216 before the Clinton/Trump election? I remember sitting in my home office talking with you about my market concerns with the upcoming election. You gave me the same advice as in this post, albeit without the pretty charts. I took your advice to heart and have followed it ever since. I will continue to hold the course and if there is a correction before or after this upcoming election, will consider it an opportunity for dollar-cost averaging. Your thoughtful knowledge-sharing has been integral in the success of my retirement investment strategy. Thank you for that, and for today’s reminder!
Oops, realized I had the wrong election. Think it was the Clinton/Trump election of 2016. How the years fly by and start to run together in my mind. Either way, the appreciation for your help getting through the uncertainty of each election still applies. Thank you!
Loys! I do remember it, and like you didn’t remember exactly which election. As you point out, the answer is the same every time. You’re so welcome and I’m so pleased for you that you’ve been able to remain calm and let the thirty million people working for the S&P 500 companies create new products and services while increasing earnings over time. I’m always here if you would like to talk again. :)
A thoughtful, well crafted exposition on creating investment success. Sadly, and all too often fear and greed drive our money decisions. Your clients are fortunate, James, having you to guide them with firm kindness throughout the past several months, saving them millions of compounded dollars, returns they will fortunately see due to your steady hand. Great article!!!
Rob - as usual - so great to see your name here. Thank you for reading and for commenting. Yes, investment success is directly proportional to quieting our own ego, and our fears, and letting ingenuity work through time. We humans aren’t wired this way so it’s hard. Something at some time, gets under our skin and we need to sit chilly and not react. :)
Again, thank you and great connecting with you here.
What an utterly convincing and understandable articulation of how investing works. And the parallels to the meaning of relationships and deep connections is the cherry on top.
Thank you Rick - yes, I think the S&P500 has almost 30 million people working in those 500 companies, creating value through time, while new companies enter and others exit. It’s amazing that anyone can own that ingenuity at almost no cost through an index fund.
Thank you for reading Rick and for commenting. This one was harder for me, because of the #’s and statistics. I find it’s a bit easier to write about non-heady stuff.
But I think this is where you really shine James, being able to integrate the numbers and the human stuff with such skill and help those of us without a numbers orientation make easy sense of the financial world. I'm going to be nudging you for a book.
Thank you Rick. Nudge away. It's on the horizon and I intend to take a stand for starting in 2025!
James, this essay flows like the majestic line it celebrates—steady, insightful, and quietly profound. Reading it, I couldn’t help but think about a time I sold out of an investment during a market dip, convinced I’d outsmart the chaos—turns out, the chaos was smarter than me.
Your Met analogy is brilliant; it reframes the market’s jagged ups and downs as brushstrokes in a masterpiece that only patience can unveil.
What do you think tempts most people off course. is it fear, ego, or the seductive thrill of doing something?
Also, I love the nod to investing as a self-portrait. it's poetic, humbling, and just enough to keep me from checking my portfolio tonight
Kuriakin, thank you so much for reading and commenting. Your writing is so fluid - and I loved the line that you were convinced you could outsmart the chaos, but the chaos outsmarted you. Your question is a GREAT one. Being in the business for almost 20 years, I think what tempts most people is fear - because when markets are going down, all people want the pain to stop. Especially when the $ value of loss gets bigger. I've also discovered that women are better investors than men because their egos are less active. I've never met a woman, who is tempted by their ego to outguess or outsmart the market. Because of that, they just need to manage their fears.
Thank you again and I look forward to exploring your essays too
That S&P line really is a thing of beauty.
Money volatility amplifies our emotions in both directions of greed and fear. If you look too closely it can drive a person to do something rash.
Lucky for me that I learned a painful market lesson early in life. First doubling my initial investment over 6mth, but then wiping out 93% in one night. Lesson learned- Trading is not investment it’s a bet.
Now everything is *invested for longevity* in index.
Randall, thanks for reading - I have your new post to get to this weekend. I'm looking forward to it. You said it very well - amplifies our emotions in both directions. I too, learned this lesson and may write a short essay on it at some point. One thing I've discovered from serving 250 households, is that everyone has SOMETHING that will get under their skin, and no one has anything even close to a perfect investing track record, except Rip Van Winkle - if he invested in the S&P prior to going to sleep. :) People can do pretty well and reach their goals if they employ a good philosophy and stick with it most of the time.
A good reminder and explained with great clarity.
Thank you Leslie :)
An analogy that strikes at the whole soul. Well done. Always good to read you.
You bring a smile to my face. I trust you are well and your family is too. I’m looking forward to your book 📕.
So much wisdom here! I love the different ways you show that the market generally rises and it's wise to stay the course. Your illustrations, especially around the presidents, were really profound. Clearly you are a great financial advisor for your people!
Serena, I appreciate your comments. 🙏. And I’m grateful you stuck with it. I wanted to figure out a way to start the piece with more of a hook but in the end I started it with statistics. And hoped readers wouldn’t tune out early 😳.
I’m not a numbers person but it was really educational for me!
I found the metaphor of the art museum to be ironically interesting in this context. From direct experience with the boards of not-for-profits, especially arts organizations, I can tell you that many are notorious for failing to heed the advice that you have so well laid out.
All too often it comes down to a few board members losing a sense of risk vs reward, or worse, the "I know a guy syndrome", where they turn the money over to a flashy advisor who swings for the fences.
During the mid 2000s recession and market decline there were a number of arts organizations in NYC that pulled their money out of the market at the bottom and suffered permanent financial impairment as a result, failing to meet their long-term objectives and falling way behind their peers.
Drake—Double Ugh. I recall reading about entities like the arts board you refer to. It can be so very heard, especially for those who are "volunteering" on investment committees. I serve on a few investment committees, and with one of them, they did the same thing - had "the guy" who was a friend of a member in the 2008/2009 downturn, who didn't pull the money, but thought Washington Mutual was a screaming buy when the dividend hit 15%. Triple Ugh.
Thanks for the excellent perspective here. See you in WOP - I had to miss last night but will be out there tomorrow.
It is amazing how much of successful investing comes down to staying the course. Jason Zweig wrote in the Wall Street Journal a few weeks ago that most retail investors in index funds underperform the funds themselves. Why? Investors trade in and out of them, realize their losses, and miss the gains.
I have a neighbor in his early 90s who absolutely loves his financial advisor. From what I can tell, the advisor mostly just convinces him to stay in the market and not to trade based on whims and perceived geopolitical problems. My neighbor credits this advisor with making his current very comfortable lifestyle possible.
Einstein (yes, that Einstein) once wrote that compound interest was one of the most powerful forces in the world.
I'm like your neighbor's "guy"! We keep people in their seats, we try and convince them to invest long-term dollars as they become available - rather than holding them and trying to time their way into the market. But Drake, what we do a lot of is focus on all the other elements of a client's plan - from deferred comp elections, tax-loss harvesting, ensuring asset location is optimized, etc. Most of the incremental value created is through all the planning activities while keeping the investing activities intact.
And for Einstein - didn't he call it the 8th wonder of the world?
Drake - I appreciate your perspective as I expressed on your other note.
Another great essay James and a wonderful ode to the 'art' of investing. "Your investment portfolio is more than just a collection of assets—it is a self-portrait of hard work, saving, disciplined investing, and emotional fortitude in navigating market cycles."
This shows your range as a writer. From the personal, reflective, endearing, heartfelt pieces you’ve written before to this essay, which is more technical, business savvy and big picture. Cool to see you shift so easily between the two modes.
John, I appreciate your thoughtfulness. Isn’t it funny when we write, how a key sentence or two, the shiny dime of you will, shows up at the 11th hour and 58th minute? That passage just flowed out late in my process and it was perfect to tie things together.
Gonna revert back to a non investment topic next 😊.
Thank you again.