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Investing Pitfalls - The Pursuit of Perfection Thumbnail

Investing Pitfalls - The Pursuit of Perfection

Posted by John Posey

One pitfall of investing I’ve noticed over the years is the pursuit of perfection when it comes to selecting investments. Because this is such an important perspective, I’ve highlighted this in other articles like The Stock Market Doesn’t Care How Hard You Try, and my work in the Financial Freedom Field Guide. Perfection is an alluring feeling that tends to run on replay in a lot of investors’ minds making us think that just maybe we should be consistently tweaking things in pursuit of that precise combination of the “right” investments. What I’ve discovered is that it is much more useful to try to be a little less wrong tomorrow than precisely correct today for no other reason than we cannot know with any precision or consistency what the “best” investment is at any given moment.

Carl Richards, Certified Financial Planner and author, wrote a nice piece on this topic in his newsletter. Here is my favorite excerpt from the article:

The markets themselves are a reflection of our humanity and how we feel at any given moment. Unemployment goes down. Great! The market goes up. A few days later, the housing report shows a drop in sales over the previous year. Bummer. The market goes down.

Where’s that perfect investment now?

Perfection as a financial goal is impossible to achieve. There are so many variables at play that it becomes a bit like a game of Whac-A-Mole. Where will the next problem pop up? 

What if, instead of chasing perfection, we went looking for something a little simpler? What if we focus on finding financial options that meet most of our wants and still leave us time and energy to do things we enjoy?

It comes down to making the most of any particular situation and not beating ourselves up over the things we can’t control.

And by the way, that advice doesn’t just apply to investing.

Advisory services offered through Plains Advisory LLC, an investment adviser registered with the State of Nebraska. Insurance products and services are offered and sold separately through John Posey, a licensed insurance agent. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Any information provided is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal, tax, financial or investing advice and cannot be used to avoid tax penalties or to promote, market, or recommend any plan or arrangement. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.