Summer is here and if you are like me you could probably use some fresh reading material for your upcoming vacation. Rather than give you yet another book list I thought I'd provide a roundup of some of the best articles I've read recently. I recommend saving these to Pocket (my personal favorite) or Instapaper so you can read them from your tablet or phone wherever you might go on your travels this summer.
The Most Important Investment Factor - Behavior - Cullen Roche
I absolutely love this quote... “a suboptimal strategy that you can execute is better than an optimal strategy you can’t execute.” Too many people spend too much time and money trying to pick the perfect investments or the best investment strategy. Then they jump ship at the wrong time and move on to the next big thing. We stress time and again how important it is to focus on what you can control and your behavior is at the top of that list.
The Difference Between Time and Money - Seth Godin
If you aren't signed up for Seth's daily e-mail newsletter, do yourself a favor and sign up now. They are all short and to the point just like this one, yet they are almost always enlightening. We have a quote on our website about time being more valuable than money so it's clear we agree with Seth on how important this concept is. It's easy to forget how valuable time is because we don't have to spend money on it, but it is a limited resource that we can never get back once it's gone, unlike money. You can always make more money but you can't make more time. (Bonus: Seth recently started a podcast and it is also great, I recommend this one on The Long Term)
Twitter Thread- Jim O'Shaughnessey
Ok, this might be cheating because it isn't an article, but this is what makes Twitter so great (sometimes). Jim is a legendary investor and a brilliant mind and in the span of 26 tweets he spells out a ton of wisdom from his 30 years of investing. Make note of all the things he still knows that he doesn't know even after all these years, like this quote: "I don’t know how the market will perform this year. I don’t know how the market will perform next year. I don’t know if stocks will be higher or lower in five years. Indeed, even though the probabilities favor a positive outcome, I don’t know if stocks will be higher in 10 yrs."
The Pygmalion Effect - Shane Parrish
I look forward to Shane's brilliant newsletters every Sunday morning. He is always able to take insights from various disciplines and distill them down into something I can apply to some facet of my own life. This particular article goes in depth into the concept that your expectations about the future can impact certain outcomes. From the article, "The Pygmalion effect shows us that our reality is negotiable and can be manipulated by others — on purpose or by accident. What we achieve, how we think, how we act, and how we perceive our capabilities can be influenced by the expectations of those around us. Those expectations may be the result of biased or irrational thinking, but they have the power to affect us and change what happens. While cognitive biases distort only what we perceive, self-fulfilling prophecies alter what happens."
Playing in Traffic - Ben Carlson
This article makes a great analogy between the frustration of sitting in traffic not knowing what is causing it, and watching the markets move up and down without a clear explanation. "Being uncomfortable with uncertainty is one of the reasons a long commute can make people unhappy.
As Harvard University psychologist Daniel Gilbert argues, “You can’t adapt to commuting, because it’s entirely unpredictable. Driving in traffic is a different kind of hell every day. ”The unpredictable nature of the markets is one of the reasons they can be so maddening. Trying to be right all the time when investing can also be a different kind of hell every day."
Lessons from the Past 25 Years - Christine Benz
Christine continually puts out some of my favorite writing at Morningstar, and she's been doing it for 25 years now. There are some great lessons here, like "less is so much more", where she talks about how important simplicity is, and "investing is overrated", where she discusses the relative importance of behavior compared to investment choices. Coming from someone who works at a company that does detailed investment research on thousands of stocks and investment products, these statements really mean a lot.
This isn't so much an article as it is a great graphic representation of the foundations of retirement planning and what's most important. It's definitely worth a look.
It Works As Advertised - Josh Brown
I agree with Josh here that it's never good to focus on a short-term time frame, but sometimes looking at short-term market moves can illustrate an important point. If you are one of the many people wondering why on earth anyone should own bonds right now given the fact that rates are "definitely" going to continue to rise, you need to see what happened over 5 days in the bond markets recently. Just face it - markets are unpredictable so stop trying to guess what will happen next!
To Be A New Fool In The World - Jason Zweig
Jason was one of the first personal finance writers I can remember reading back in college when my dad first introduced me to him. He has been a voice of common sense in a sea of financial disinformation for years and this article is a great recollection of some of his greatest hits. Jason was inspired by the tweetstorm mentioned above to put this in writing and it's a collection I will be sure to return to often in the future. Take the time to read through all of these articles - I promise it will be time well spent.
Psychology of Money - Morgan Housel
This is a long read but is absolutely worth it. Morgan's one of my favorite writers and he makes some incredibly important points about how we relate to money in this article. A couple of my favorite quotes:
"Boring is good. If you want to frame this as a strategy, remind yourself: opportunity lives where others aren’t, and others tend to stay away from what’s boring."
"A key use of wealth is using it to control your time and providing you with options. Financial assets on a balance sheet offer that. But they come at the direct expense of showing people how much wealth you have with material stuff."
I hope something on this list resonated with you and if it did, please reach out and let me know. Enjoy your summer!
The views expressed represent the opinions of L.K. Benson & Company and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person.Please see Additional Disclosures more information.