Explore the essence of investing beyond mere performance metrics in our latest blog post. Delve into the importance of challenging the bias of hindsight and learn why prioritizing curiosity can help investors navigate the complexities of wealth management with confidence and clarity.
Process over performance.
If you only evaluate the outcome (and we’re talking about the investing landscape) over the process, you may be missing out on something that could be beautiful over time.
What am I talking about?
Hindsight bias is one of the behavioral tendencies that most of us experience. And when you look at this last month, this last quarter, this last year, for the best performer, whether it’s a stock, whether it’s an exchange-traded fund or a mutual fund, or any investment that you may make, and base your future decisions—even though we know past performance is not indicative of future results. But if you make the decision purely on performance, good or bad, if it was a great performance or terrible performance, you’re missing a lot of facts, you’re missing a lot of details, you’re going off of first instinct thinking, rather than digging deeper.
So, pause. Be curious. Be fascinated. Ask questions and dig deeper to understand what you own and why you own it.
What is the logic? What’s good about it? What’s bad about it?
Do this so that whether performance is the best, the worst, or the middle of the road, you are at ease on your path to Wisdom, Wealth, and Wellness.
Have a great day.
