Weekend Reading: Why Can’t We Stop Changing Our Investment Process?

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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Weekend Reading

A “leave it be” mindset when it comes to your lifelong savings is easier said than done. You know you have a sound investment strategy, but alas, the temptation to tinker is strong. Why?


From a behavioral finance perspective, here are a few reasons:

📌 There is a mismatch between short-term feedback and long-term goals: A strategy constructed for the long-term shouldn’t always be measured against short-term performance. Making a change based on a temporary situation is meaningless.

📌 The need to always be doing something: Sticking to a long-term plan means having faith in that plan; plus, the self-control to do nothing, even during market fluctuations.

📌 Doubting the process: Poor short-term performance can make you second-guess everything and feel pressure to make a change, even if you know it isn’t the “best” thing to do.

📌 Feeling in control: Markets come with uncertainty, but process-adjusting can make you feel as if you’re gaining back control.

📌 Optimizing not satisficing: If you’re in pursuit of the “perfect” portfolio, you will find yourself on a never-ending hunt. However, by satisficing, or “adopting a strategy that is good enough”, you’ll find a route you can maintain for the long run.

Keep in mind: This isn’t to say improving your strategy is wrong, but instead of always seeking “perfection”, learn to trust the process and maintain flexibility. A Retire With Purpose framework is designed to help protect your lifelong savings from whatever happens next, so you can focus less on always needing to “make a change”.