Category: A piece we love
There is so much here that my head is dizzy. Take 10 minutes and absorb the profound wisdom in Morgan Housel’s little rules about big things.
Speculating and investing are fundamentally different, and it pays to know why.
Speculating is exciting, full of breathtaking ups and downs. If you chart it over time, it looks like a heartbeat. Probably an elevated one.
Investing, on the other hand, is slow and boring. In the short term, you may have some ups and downs. But if you chart investing over time (over many years of time), it looks like a long slow curve upward.
Speculating is like a Vegas casino. Investing is like watching grass grow.
Know which game you’re playing.
Clients and friends of Hill Investment Group will recognize the story behind “The Paradox Of The Herd” written by John Jennings because they are living it every day that they are Taking the Long View. John is the President and Chief Strategist of St. Louis Trust & Family Office, author of the blog Interesting Fact of the Day and forthcoming book titled The Uncertainty Solution: How to Invest with Confidence in the Face of the Unknown, and good friend of our firm.
The brief post discusses the emotional rollercoaster that those who invest differently than “the herd” ride, even though their rational selves know that doing so has a good chance of leading to higher expected long-term returns.
The good news is: You’re not alone. Everyone at Hill Investment Group is riding the same roller coaster as our clients because we invest our money the same way. (N.B. Everyone has their own asset allocation.)