When Ponce de Leon was searching for the Fountain of Youth, he may have been better off looking closer to home by exploring his own, inner attitudes.
So says the evidence-based research on how to improve on our stamina as we age. In fact, we couldn’t help but notice a number of uncanny parallels between our advice about sound investing and the following, evidence-based excerpts from a recent Wall Street Journal article, “To Age Well, Change How You Feel About Aging.”
Step One: Identify
In aging – “The first step in overcoming negative stereotypes about aging is simply to understand how they work and recognize just how debilitating the consequences can be. … [E]ducation alone can have a big impact on how we look at aging.”
In investing – The first step toward improving your investment experience is to move past the typical ingrained attitudes on how investing is “supposed to work.” The body of evidence is clear: stereotypical efforts to try to pick winning stocks, and chase or flee hot and cold markets are far more likely to detract from than benefit your financial well-being.
Step Two: Understand
In aging – “Once you’re aware of the power of stereotypes, it’s important to be aware of just how pervasive they are … Studies show that negative stereotypes about aging – for example, that older people inevitably grow less productive and more depressed – are as pervasive as they are inaccurate.”
In investing – Just as stereotypes about aging can permeate our social fabric and skew our perceptions, so too can the continuous hot and cold financial news blasting across the airwaves cause ill-advised, gut-level reactions. Our instincts tend to lead us astray before our higher reason has time to set us straight.
Think you’re immune to being ruled by your subconscious thoughts? As cited in the WSJ article, this eye-opening Implicit Association Test hosted by Harvard University lets you glimpse at your own potential prejudices on aging and other social mores. Give it a try … if you dare.
Step Three: Prepare
In aging – “But being aware of negative stereotypes isn’t enough. Research shows that negative stereotypes about aging have a much stronger influence over older adults than positive ones – so it’s important to learn to emphasize the good side of aging.”
In investing – Because our knee-jerk reaction to frightening or frothy market news can be overpowering, investors must plan ahead if they want to pursue rational investment outcomes. A written Investment Policy Statement can help with that. So can an investment “fire drill,” to prepare you for the real-life challenges that investors face.
Step Four: Proceed (Realistically)
In aging – “All that said, it’s important not to go overboard and expect an entirely positive experience of aging.” (As Bette Davis reportedly warned us: “Old age ain’t no place for sissies.”)
In investing – While it’s important to maintain an upbeat outlook on life, aging and investing alike, we’re not suggesting you lose touch with reality. Just as aging brings us advantages and hardships alike, investing calls for both a positive outlook to see you through your journey, as well as a generous dose of realism for facing the perils along the way. An objective advisor can help you find that balance in proper measure, strengthening your financial capabilities for the long haul.
As you know, we here at SageBroadview are big fans of an evidence-based approach to better living. We’re glad to know that the evidence on what is good for your personal health appears to be a good guide for your financial wealth as well.
Sage Serendipity: When it come to Star Wars toys age is a state of mind. The latest movie in the franchise, Star Wars: The Force Awakens, is coming out this Friday! To mark the release, Saturday Night Live recently made a spoof commercial on the enormous amount of merchandise surrounding it and its appeal to the inner, older geek. So, how many of us preordered tickets?