Working Wealthy – 2020 is the new 2009
Perfect is the enemy of good.
I’m not certain who said it first. I understand it relates back to an Italian proverb, and it appears Voltaire was the first to pen a paraphrasing of it. In any event, let’s not get bogged down with precision on the source of the learning.
Let’s focus on how, as human beings, we spend so much energy on the exactness of a decision and can at times miss the entire opportunity before us due to that obsession with perfection.
I see this a lot today in how investors, traders and market timers have reacted to our COVID economy and market.
Pay attention to two different toilet paper shoppers:
1. One shopper went to her local grocery store and was focused on getting enough toilet paper to last however long she thought the shelter-in-place order might be in Chicago. Instead of worrying about brand, price or quality, she simply bought what she could and a lot of it.
She arrived home an hour later with enough toilet paper for several weeks and felt satisfied and well-prepared.
2. The second shopper was a little different. He went to his local grocer and tried to find his toilet paper—you know, the ultra-soft, multi-ply, organic cotton stuff of dreams that he had to have. He passed on purchasing any totally adequate substitutes. In fact, he traveled to more than six stores in search of his favorite TP.
He arrived home several hours later with a six-pack of “his brand” of toilet paper—he was also frustrated, exhausted, and not very prepared for the next several weeks of quarantine.
I’m not going to argue the merits of quality toilet paper. However, I will point out how each shopper felt after their shopping trip.
One felt calm, prepared, and satisfied. The other was irritated, ill-equipped, and tired.
The Time is Right
In recent conversations, I’ve learned that some investors are waiting for the market to settle down to get back in or invest cash. That’s entirely understandable. It was a violent ride down to March 23rd when the market hit a deep crater.
In fact, investing money in January as compared to March felt night-and-day different. The March investors feel like geniuses while the January folks want to hide.
If my ultimate goal is to own a well-diversified, balanced portfolio that has a strong probability of positive returns over the next several years and decades, am I not better off being invested today rather than hoping I can find the absolutely perfect time to get invested?
My toilet paper example is just what some investors are stuck with today. Do you hold out waiting for exactly what you think you need and create extra stress and anxiety in doing so? Or do you focus on your big picture need and simply and cost-effectively cover that need regardless if it’s exactly what you’re looking for.
I’m not suggesting anyone sacrifice their principles. I’m simply saying in the end, we all need toilet paper. Just don’t wait too long to get yours.
Nick Cosky, CFP® is a Wealth Manager and Owner at BDF and is responsible for educating and introducing prospective clients that are considering hiring BDF for their wealth management needs. In previous roles, Nick has served as the head of BDF’s Financial Planning Committee and has participated on the Business Owner Team and Women’s Service Team. Nick is passionate about the planning that BDF does for its clients and enjoys every aspect of the client-advisor relationship. Nick graduated from Lawrence University in Appleton, Wisconsin, with a Bachelor of Arts degree in History and English, and he is a CFP® professional.