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The Investing Research Junkie and the Unsolvable Riddle

I have long since surpassed the amount of study the average investor needs to do a solid job as an investor. At this point, you might say that I am a bit of a junkie when it comes to reading and researching investing. This has probably been more or less true since I first started investing in the Spring of 2015. Yet back then I could justify my fetish with the fact that I wanted to learn more about personal finance topics, investing included.

I needed to get edumacated!

We passed that point a few years ago, folks. At this point, I think I’m starting to wonder if my continued obsession over the topic is always a good thing.

Of course, there are benefits: as long as I keep my head on straight and make wise decisions, knowing more about investing and finance will only help on the money side of life. So far that seems to be true.

Recently I have been fiddling with our investments. Specifically, in the past month, I have made the following adjustments or additions:

  • Moving funds from two ETFs to corresponding mutual funds because I find it easier to work with mutual funds on Vanguard.
  • Changing the fund I used in one of my IRAs to a more aggressive (ie more allocated to stocks) fund.
  • Opening up a new investing account through M1 Finance, which lets me buy fractional shares (unlike Vanguard for ETFs) and choose specific funds (unlike Betterment).

Each one of these moves has involved a lot of thought and research. While by and large I have enjoyed myself, I sometimes wonder if I’ve fallen down the rabbit hole looking for “the right answer;” that is, the perfect investment choice, the correct way to go (there must be one!). I struggled with this in school. Always trying to do it right!

Yet there often is not one way that is truly right, so one can waste a lot of energy trying and failing, and getting all bent out of shape and miserable in the process. The fundamental problem of investing, the unsolvable riddle if you will, is this: what will the future hold?

Investing (like most topics of study) can only be studied in the rear-view mirror. In the investing world, you can’t study things that haven’t happened yet.* In any book I have ever read on the topic, and in any cool site I have studied like portfoliocharts.com or portfoliovisualizer.com, the bulk of the data** and perhaps all the experience that is being drawn from is in the past.

That is fine and all, yet… “past performance does not indicate future results.” Or “the past is not prelude.” In other words, what has occurred most certainly is not exactly what will occur. We can look back and see the patterns (to paraphrase Mark Twain, history rhymes), but that does not tell us what patterns will emerge in the future. Surely they are likely to be different from the past in many ways.

So perhaps, rather than trying to discover the right answer or the safest course of action or the best answer–things which we probably won’t even know until afterward when all is said in done–we ought to be satisfied with the work we have done and leave well enough alone.

Words this junkie would be smart to listen to!

*Obviously businesspeople, entrepreneurs and other visionaries envision the success of a new product, service, or property before it has been created. I’m referring to literature I have read on investing in the stock market.

**Perhaps with the notable exception of the Discount Dividend Model, which William Bernstein discusses in his “Four Pillars of Investing.”

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