This blog post was contributed by Grant Blindbury of FMB Wealth Management.
Thanksgiving has long been one of my favorite holidays – and not just because of the pie. Gratitude, the very essence of Thanksgiving, is one of the few activities that can amazingly generate more energy than it takes. Something so powerful should be exercised on a daily basis, right?
Sadly that doesn’t happen as often as it should. We get busy. We forget. But Thanksgiving offers us a break, so we can refresh and remember to be grateful.
What are you grateful for as you embark on your 2013 holiday season? If you’re like me your first thoughts leap to you and yours: your family and friends, your personal interests and community activities, your health and well-being, your satisfying career or retirement pursuits.
Underlying these higher points, you also will hopefully feel thankful that your wealth management is in place so that, come what may (and it will), you are better able to maximize the time you devote to the people, places and moments that you hold most dear.
Along that theme, I’d like to share with you a useful anecdote to help further connect your wealth with your best-spent life. Relax, enjoy … and be thankful that investing can make sense, if you let it.
The Soccer Goalie Lesson
Proving that, if something can be studied somebody will study it, a group of academics published a paper in the October 2007 Journal of Economic Psychology analyzing elite goalkeepers’ reactions to soccer penalty kicks around the world. The study concluded that, given kick direction probabilities, the best chance of blocking a goal was to remain in the middle. And yet, goalkeepers almost always jumped to the left or right when trying to block an incoming ball. Those champion goalies could not force themselves to “just stand there,” even when solid evidence demonstrated it was the best decision they could make.
The parallel between these goalies’ instincts and our so-called passive approach to investing is clear. As you’re enjoying your Thanksgiving holiday, I hope you’ll enjoy it all the more knowing that, by remaining true to an evidence-based investment strategy does not make you a “passive” investor, but rather an intelligent one.
Action bias among elite soccer goalkeepers (http://www.sciencedirect.com/science/article/pii/S0167487006001048)