State of regret

I can’t always artic­u­late what I’m think­ing as clear­ly as I’d like, but I know when some­one else does:

Stocks don’t make new highs every sin­gle day, so most of the time you’re going to be under­wa­ter from your portfolio’s high water mark. This means there are plen­ty of chances to be in a state of regret when invest­ing in stocks.

This makes sense when you con­sid­er that stocks are pos­i­tive just a lit­tle over half the time when look­ing at returns on a dai­ly basis, but it can be dif­fi­cult to wrap your head around this fact.

Being in a ‘state of regret’ is not help­ful for build­ing (or rein­forc­ing) healthy wealth-build­ing habits. This is why it’s impor­tant to mea­sure some­thing oth­er than “port­fo­lio val­ue”. It’s per­fect­ly nor­mal to be “down from highs” (emo­tion­al­ly, and finan­cial­ly) and mea­sur­ing some­thing else not just a math trick to keep investors stick­ing to their plans.

Curious about what to mea­sure and how it’ll help you build sus­tain­able wealth? Yeah, there’s a book for that.