“My neighbor invested all of his portfolio in TESLA and now I’m envious! It feels like I’ve FOREVER missed out. And I might have less money in retirement because I missed the hot stock, ETF, Mutual Fund, etc.?”
“As an investor, you get something out of all the deadly sins—except for envy. Being envious of someone else is pretty stupid. Wishing them badly or wishing you did as well as they did—all it does is ruin your day. Doesn’t hurt them at all, and there’s zero upside to it."
"If you’re going to pick a sin, go with something like lust or gluttony. That way at least you’ll have something to remember the weekend for.”
Warren Buffett
We understand these concerns and feelings because we’re investing for retirement too! Furthermore, as investment advisors we hear these concerns almost every year. If you’re a diversified investor, there will always be an asset class, a high-flying stock or mutual fund that has higher returns than your diversified portfolio.
Does this mean we’ll have less money for retirement than our neighbor who’s ONLY investment last year was TESLA? Historical evidence says you’ll likely do just as good or better over the long-term. The “over the long term” part of the sentence presents the challenges. In other words, it’s really hard to be a long-term investor when it feels like the world is falling apart around you AND your drinkin’ buddies are killing it with their daily newsletter stock picks!
We all feel the pressure (envy) of missing out on great investments that we should have known were going to do better than all the others. The good news is that diversification still works. It’s never really “cool” nor does it ever feel great. However, we believe, and the evidence supports the fact that your chances of success are better in the long run. Check out the numbers from the chart below from BlackRock.
Take a look at our short video where Charlie discusses what it was like in 2020 as investor. How challenging it can be to stay the course and not chase recent returns. Furthermore, the difficulties of feeling like you’ve forever missed out if your returns weren’t as high as your neighbor who invested in TESLA, Bitcoin, etc.
Thank you!
Charlie & the Team at Leading Edge Financial Planning
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this video will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Moreover, you should not assume that any information or any corresponding discussions serves as the receipt of, or as a substitute for, personalized investment advice from Leading Edge Financial Planning personnel. The opinions expressed are those of Leading Edge Financial Planning as of 03/12/2021 and are subject to change at any time due to the changes in market or economic conditions.