Suppose you’re on vacation and your car breaks down. After you get a rental, you begin looking for a local place to get your vehicle fixed. You pull up the trusted Internet and begin to browse the listings for a good mechanic. You click through to one local repair shop’s website and are immediately impressed. Displayed prominently are testimonials after testimonials–too many to count. You scroll through the list of reviews and see nothing but praise for the repair shop. Every single customer that leaves a review, it seems, has nothing but nice things to say. This mechanic must be the best around, right?
Of course, as a consumer, you know that isn’t necessarily the case. If the repair shop has any control of the reviews listed on its website, of course it’s going to screen them. It is likely that the repair shop will only share the reviews that paint the company in a positive light. The company wants everyone to see its successes and nobody to see its failures. So, they only talk about their strengths–and only share the reviews that highlight those strengths. And, much of the time, it probably works. People see the slew of positive reviews and immediately assume the best about the company.
It isn’t just businesses that try to sugarcoat their weaknesses and dust their faults under the rug. It’s human nature. We all do it. We don’t like to be vulnerable. We don’t like the reveal the skeletons in our closets. We don’t like people to know how imperfect we are. So, we put up a front. We wear a mask of perfection that makes us look like we’ve got it all together.
As an investor, this reality of human behavior is an important thing to keep in mind. Why? Because people talk about their financial successes just like every other success–and they hide their financial failures just like everyone other failure. When you’re talking with your friends and colleagues about their investments, it can be very easy to feel like you’re missing something. It can be very easy to get discouraged, because everyone might seem to be doing better than you.
The secret to successful investing, like many things, is focus. Don’t worry about how well everyone else is doing; focus on how close you are coming to accomplishing your goals. People aren’t sharing their bad investments; they’re only bringing up their good investments. So, of course they are going to look like better investors than you. Comparing yourself to others can cause you to lose sight of your objectives and begin to take on unnecessary risks to “catch up” to the imaginary standards that have been set for you.
Chances are, no one is doing any better than you. And, even if they are, that’s not important. The important question to ask is, “How close are you coming to accomplishing your goals?” If you would like any help understanding how to develop a sound plan for investing, feel free to reach out to us for a free consultation. We would love to help you find the focus you need to achieve the success you deserve.