How To Survive A Fudgy The Whale Market

Are you a true believer?

It’s not easy staying the investing course without evidence.

There’s an old story applicable to investing solely on faith.

A mountain climber foolishly climbing alone slips off a precipice and finds himself dangling at the end of his safety rope, a thousand feet above a ravine. He calls out in despair, “Can anybody help me?” To his astonishment, the clouds part, a beautiful light pours through them, and a mighty voice replies, “yes, my son, I can help you. Take your knife and cut the rope!” The climber takes out his knife, and then he stops and thinks and thinks. Then he cries out: ” Can anybody else help me?”

Actions speak louder than words. It’s harder sticking to a plan when it’s not based on measurable data.

Richard Dawkins stated, ” The meme for blind faith secures its own perpetuation by the simple unconscious expedient of discouraging rational inquiry.”

Having blind faith can be harmless in certain matters. Using it to plan your retirement isn’t one of them.

Anticipating the future is human beings’ finest achievement.

Daniel Dennet comments. “We have managed in a few short millennia of human culture to multiply the planet’s supply of look ahead by many orders of magnitude. We know when eclipses will occur centuries in advance; we can predict the effects on the atmosphere of adjustments in how we generate electricity…….We gather information from the environment using our senses, and then we use science to cobble together anticipations based on that information. We mine the ore, and then we refine it, again and again, and it lets us see into the future – dimly with lots of uncertainty, but much better than a coin toss.” 

This sounds a lot like building a holistic financial plan. Science trounces hope when facing large decisions regarding your money, but there are limits.

Many veer off course, following strategies based on faith rather than fact.

These include:

Buying a stock based on a CEO’s personality cult.

Investing in a SPAC.

Thinking Dogecoin or Polkadot will fund your retirement.

Timing the market based on your “gut.”

A faithless planet would be dismal; investors need more in their tool belt than just belief.

Without concrete evidence, it’s much easier bailing when the going inevitably gets tough. Moving on to the latest and greatest suddenly becomes an enticing option.

What’s an investor to do in this market filled with more temptations than a Fudgy the Whale Cake?

There’s tremendous evidence, but not certainty, that these tried and true investing tenets build wealth over the long term.

Diversification is the only free lunch available for retirement savers.

Investment costs matter – a lot.

Time in the market is much more important than market timing.

Focusing on things you can control, like taxes and savings rates, is never a bad thing.

Emotional investing is a murder hole.

A bad financial plan is better than no plan at all. Don’t let the perfect become the enemy of the good.

Avoiding big mistakes is more important than being a Financial Ninja.

While not glammed up or 100% certain, these principles are superior to flipping a coin.

Predicting the future is tough enough. Don’t make it harder by ignoring the facts.

It’s fine to have faith in your favorite sports team.

Your financial plan requires you to be more than a fanboy.