I have recently returned from a trip to the US. I won't go into the details, but I was able to enjoy some great weather while the rain poured down over NZ.
Unlike a lot of people, I don't mind flying. There are very few places where you are expected to do nothing except sit in a chair, watch a few films, maybe read a book, all while your meals are brought to your chair.
On the flight to LAX, I was delighted to find a 2021 documentary about the American author Kurt Vonnegut, called Kurt Vonnegut: Unstuck in Time.
Like many young men, I discovered Kurt Vonnegut's novels when I was in university. I was drawn in by his black humour, unusual writing style (such as spoiling the plot points in his own stories) and sci-fi wanderings.
But for all the bleak scenarios he threw his characters into and satirical observations, Vonnegut maintained a pretty simple view on people and their place in the world. He thought life was pretty tough on people so you've got to be kind to each other and yourself. When he wrote this in God Bless You, Mr. Rosewater he imagined instead an introduction to newborns in a maternity ward.
"Hello, babies. Welcome to Earth. It's hot in the summer and cold in the winter. It's round and wet and crowded. At the outside, babies, you've got about a hundred years here. There's only one rule that I know of, babies — "God damn it, you've got to be kind."
If you are starting to wonder how this ties back into my experience at Strategic Wealth and investing in general, there was another quote of which the documentary reminded me.
“If this isn't nice, I don't know what is. ”
This quote also gave the title of Vonnegut's novel collecting addresses given at college graduations. The short video below tells how it was his uncle who shared the phrase with him, saying people seldomly recognise when they are happy. He believed it was important to recognise when they were and take the time to appreciate it.
This is what reminded me of my own experience with investing. When markets are bad, they seem to dominate headlines, watercooler conversations and people's headspaces. When markets are recovering or breaking new heights, people's minds turn to other things.
Kurt Vonnegut may have had a better description of what behavioural scientists called 'loss aversion', the phenomenon where investors feel the impacts of losses twice as strongly as those of gains. Our strong disliking of falling markets is why they stick in our minds.
Markets are usually going up. Pick any month for the S&P 500 going back to 1926 and there is a two thirds chance it it positive. It is normal to feel uneasy during the bad ones. During the good ones, don't forget to recognise, well, isn't that nice?
After a dreadful 2022 (notably preceded by a fantastic 2021), the S&P 500 is approaching new heights again. Remember, we're in it for the long haul. This won't be the new height reached. That is why we stay invested.
More importantly, having your investments built around your goals with a solid plan means less worrying when things are shaky. Hopefully, this also means being able to enjoy the things you invested your time and money towards enjoying.
When you do, don't forget to say "if this isn't nice, I don't know what is".
I couldn't finish this article without sharing a longer video of the speech mentioned above. For any Kurt Vonnegut fan, it is well worth a watch.