An increase in the diagnosis of a particular problem is not the same thing as an increase in the actual incidence of that problem, but that’s hard to come to terms with in real time.
A related truth is that, as my physical therapist says, just the act of getting an MRI dramatically increases the chances you’ll get surgery. No one has perfect joints, and surgeons do surgery. The incentives are a bit skewed, is what I mean. So often (though of course not always), a good therapist can do more good without an MRI than a surgeon can do with one.
If you put these two truths together, then you might end up with something like this in the context of your investments:
- The more often you look at your portfolio, the more often you will see both good and bad things, but the bad things will stick out much further than the good ones.
- Those bad things will be spoken about by many amateurs and professionals alike whose incentives are toward surgery-like action, which far more often than not is unnecessary and risky.
- Therefore it is better to reduce time spent MRI-ing your portfolio (if you’ll permit the extended metaphor) and more time doing a financial version of physical therapy: Building strength through good savings habits, being flexible and resilient in the face of uncertainty, and understanding that pain is real but no reason not to keep living your life well.
Meaningful Returns 