Perfection is of another world. It certainly isn't of this one. A contemplative stare in the mirror should quickly enough disabuse the perfection notion, as should any random conversation with a fellow human. And yet people through antiquity have been duped to believe perfection is of this world. Perhaps not in the present, but certainly in the future -- that repository of every dream and aspiration.
Marx, Lenin, Trotsky, and other prophets of perfection manipulated the gullible and the hopeful into believing a future utopia populated with perfected humans was possibly. It was all a self-serving ruse, of course. By promoting the fantasy, the prophet's constructed lucrative oligarchies populated with themselves and a cadre of favored apparatchiks. The perfected future never arrived, misery did.
Rousing orations are one path to perfection ruin. The inner voice is another. Honore de Balzac's The Quest of the Absolute features Balthazar Claes, a protagonist hell-bent to ruin himself and his family in his pursuit of perfection (in the pursuit of perfected alchemy). Claes succeeds, though not in achieving perfection.
Potential investors are as stymied by the quest for perfection as anyone. I say "potential" because these people fail to invest, or invest only a fraction of their investable capital. We call it paralysis through analysis.
Waiting for the perfect time to invest (I refer specifically to investing in stocks) guarantees you will never invest. Stock prices will always be too high and never enticingly low. The stock-influencing macro-variables are always frustratingly off-kilter: interest rates are too high or to low, monetary policy too loose or tight, economic growth too hot or too cold, political leadership too conservative or too socialist. Let's not forget international conflagrations, which are omnipresent and perpetual.
Uncertainty is the corollary to imperfection. If you believe perfection is more near than far, you believe the same of certainty. But the more certain you are of the future, the more likely you will be sideswiped by uncertainty.
Market volatility was low, complacency was high entering 2000, 2008, and 2020. Volatility spiked, as did fear of the future. Investors swore to high heaven the world had become less certain. It had not. Investors should have been just as considerate of uncertainty in 1999, 2007, and 2019. Uncertainty is as constant as imperfection. Perception is what varies.
If you're banking on perfection and certainty before you invest, you're brokerage account will remain forever bare. You invest as intelligently as you can. (See my previous post for guidance on this matter.) You move forward and act, assured that your timing will will be off: a lower price will surely arise. You are sure to blunder.
Imperfection ensures uncertainty, which no one can overcome. Anything can happen today that can happen in the next hundred years. Perhaps a 50% drop in the major market indices looms large. But history has proven that the investor who continually acts intelligently to exploit the compounding wonders inherent in stock investing will know that he will be successful with near certainty. Even the paragon of bad timing will succeed, as long as he remains disciplined and intelligent in his actions. .
If you do nothing but buy the S&P 500 index at its peak, you will prosper, as long as you remain intelligent (that is, remain invested over time measured in decades).
Had you invested $100,000 in an S&P 500 index fund at each of the three previous peaks -- 2000, 2005, and 2015 -- you would have netted an $80,000 gain (or 26.6%) over your holding period. The calculation is even conservative by excluding the S&P 500's roughly 2% dividend yield.
Ignore the Siren song of perfection, whether it's generated from without or from within. Strive to continually improve and do the best you can. If you are an intelligent investor doing the best you can, you'll eventually discover that intelligent, repetitive action is good enough to generate enviable wealth.
Perfection is of another world, The good news is that good enough is usually good enough to succeed in this world.
Marx, Lenin, Trotsky, and other prophets of perfection manipulated the gullible and the hopeful into believing a future utopia populated with perfected humans was possibly. It was all a self-serving ruse, of course. By promoting the fantasy, the prophet's constructed lucrative oligarchies populated with themselves and a cadre of favored apparatchiks. The perfected future never arrived, misery did.
Rousing orations are one path to perfection ruin. The inner voice is another. Honore de Balzac's The Quest of the Absolute features Balthazar Claes, a protagonist hell-bent to ruin himself and his family in his pursuit of perfection (in the pursuit of perfected alchemy). Claes succeeds, though not in achieving perfection.
Potential investors are as stymied by the quest for perfection as anyone. I say "potential" because these people fail to invest, or invest only a fraction of their investable capital. We call it paralysis through analysis.
Waiting for the perfect time to invest (I refer specifically to investing in stocks) guarantees you will never invest. Stock prices will always be too high and never enticingly low. The stock-influencing macro-variables are always frustratingly off-kilter: interest rates are too high or to low, monetary policy too loose or tight, economic growth too hot or too cold, political leadership too conservative or too socialist. Let's not forget international conflagrations, which are omnipresent and perpetual.
Uncertainty is the corollary to imperfection. If you believe perfection is more near than far, you believe the same of certainty. But the more certain you are of the future, the more likely you will be sideswiped by uncertainty.
Market volatility was low, complacency was high entering 2000, 2008, and 2020. Volatility spiked, as did fear of the future. Investors swore to high heaven the world had become less certain. It had not. Investors should have been just as considerate of uncertainty in 1999, 2007, and 2019. Uncertainty is as constant as imperfection. Perception is what varies.
If you're banking on perfection and certainty before you invest, you're brokerage account will remain forever bare. You invest as intelligently as you can. (See my previous post for guidance on this matter.) You move forward and act, assured that your timing will will be off: a lower price will surely arise. You are sure to blunder.
Imperfection ensures uncertainty, which no one can overcome. Anything can happen today that can happen in the next hundred years. Perhaps a 50% drop in the major market indices looms large. But history has proven that the investor who continually acts intelligently to exploit the compounding wonders inherent in stock investing will know that he will be successful with near certainty. Even the paragon of bad timing will succeed, as long as he remains disciplined and intelligent in his actions. .
If you do nothing but buy the S&P 500 index at its peak, you will prosper, as long as you remain intelligent (that is, remain invested over time measured in decades).
Had you invested $100,000 in an S&P 500 index fund at each of the three previous peaks -- 2000, 2005, and 2015 -- you would have netted an $80,000 gain (or 26.6%) over your holding period. The calculation is even conservative by excluding the S&P 500's roughly 2% dividend yield.
Ignore the Siren song of perfection, whether it's generated from without or from within. Strive to continually improve and do the best you can. If you are an intelligent investor doing the best you can, you'll eventually discover that intelligent, repetitive action is good enough to generate enviable wealth.
Perfection is of another world, The good news is that good enough is usually good enough to succeed in this world.
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