You Know More About Investing Than You Think You Do
September 2023
No matter how familiar we are with investing, we’ve all navigated uncertainty, weighed risks and rewards, and made carefully considered tradeoff decisions. Just by being human, we’ve been compelled to tackle the central challenges of life—which also happen to be the central challenges of investing.
At Rogowski Wealth Management, we believe that having a good investment experience is about more than stock returns. What matters just as much to us is how someone feels along their financial journey.
Investing better means living better. Not just because it can lead to having more money, but because many of the habits that serve us well as investors serve us well in life, too. Here are the key principles we follow that you may find helpful in investing.
Uncertainty Creates Opportunity
Uncertainty can be uncomfortable, but we often forget that, without it, there would be no opportunity. When we decide to move to a new city or change career paths, we don’t know exactly what will happen. There’s always a risk that things won’t work out the way we had hoped, yet these experiences help us grow and can change our lives in amazing ways.
When you invest, returns are compensation for taking on uncertainty. Without risk, there would be no reward. But there’s also risk in choosing not to invest, because if your money doesn’t grow over time, it won’t go as far in the future.
Plan, Don’t Predict
We’ve all tried to predict what will happen in life, only to be disappointed when it didn’t turn out the way we anticipated. But human beings develop strategies to deal with the fact that none of us have a crystal ball. We interview a series of job candidates, even when there’s a clear front-runner. We wear a life jacket on a boat, even though we know how to swim.
Investing is just like life: For maximum peace of mind, we make plans that account for a broad range of possible outcomes. This way, you can feel empowered by the unknown instead of paralyzed by it.
Research shows that stock pickers consistently underperform their benchmarks. But you don’t need to be able to predict the sole winners to have a good investment experience and achieve your goals.
Control What You Can Control
So much in life—good and bad—is out of our control. Sudden storms can pummel us in the middle of summertime. A sports team that seemed destined for a disappointing season can come out of nowhere to win a championship. While we can’t control everything that happens, we can take charge of how we prepare for and react to life’s curveballs.
In investing, you can’t control the ups and downs of the market. What you can control is how much you save, the risk you take on, and the guidance you seek in putting together an investment plan that’s right for you.
Tune Out the Noise
When you focus on an important goal, other people’s opinions can be distracting, even derailing. Who cares if a friend doesn’t agree with your new exercise plan, as long as it’s working for you? Once you’ve done the planning and come up with a road map for success, rally your supporters and turn down the volume on your detractors.
This mindset is also key to being a successful long-term investor. Many of us are exposed to a barrage of investment commentary. As tempting as the ideas may sound, they’re potentially harmful distractions. Things that seem too good to be true usually are—and yielding to your “fear of missing out” can exact a deep price in the form of lower returns over a lifetime.
How do you tune out the noise? Working with a financial advisor at Rogowski Wealth Management can help you see past the headlines to cultivate discipline and the sense of security that comes from knowing you have a well-thought-out plan.
“You can learn this from us, or the market will teach you, but the market sends out really expensive tuition bills.”