Controlling the ”Controllables”
“Knowing what you don’t know is much more
useful in life and business than being brilliant”
Having become an avid follower of Stoic philosophy over the last few years I have come to understand that one of its intellectual pillars is classifying all of life’s experiences into one of two buckets. The first bucket I would call “things that you can control”, with the second one being “things that you can not”. As a result of adopting this philosophy the amount of stress in my life has been reduced exponentially. I now appreciate that around 80% of the things that happen to me are completely out of my control … and therefore never worth worrying about. And so it is with investing.
Granted 80% of what happens to your portfolio is out of your control (i.e., interest rates, inflation, what the stock market did today, President Trump’s most recent ridiculous Tweet, etc.), but a critical 20% is very much up to you. Frankly, this 20% will make or break your financial future, most importantly, starting with your behaviour, specifically, not panicking out of the market when it has one of its frequent, but temporary, declines. Or, unlike our friend below, make sure to save a significant percentage of your income early, and often well before your retirement.