Macro Minute: Week of July 28, 2025
“Don’t confuse activity with productivity. Many people are simply busy being busy.”
Robin Sharma
When it comes to investing, there has been countless wealth left on the table because we feel the need to DO SOMETHING. We tend to have all kinds of reasons we invent to make trades in our accounts, and rarely are they the personal decisions that we should consider. Often, we make sell decisions because we get scared, and we want to buy because we get excited. These can be simply stated as fear and greed. Our emotions are things that we must constantly fight to become better investors. The good news is that being aware of them is half the battle. Another helpful thing is to think of this simple graphic.
The more we do the lower the outcome in investing. If we can remember to stay invested in a diversified way and not fall victim to fear and greed, we will have much higher returns.
There have been countless studies over the years to corroborate this. Here is one from BlackRock.
Over the 20-year period of this study, they found that the average investors return was less than inflation. This has been true for multiple time periods not just this period with two large bear markets. History proves over and over that people’s emotions drive investment decisions, creating poor returns.
What is a person to do then?
Before ever investing a single dollar, think about how you would feel if you saw the value of your investments going up and down. Think about how over history the values of assets go up and down. Then consider how on average baskets of securities tend to go up much more often than they go down. Then lastly, remember that the odds of making money go up the longer you hold that basket of different assets. If you are made nervous by seeing the values going up and down, then you can strategically look at your account less often. If you are made nervous by the dollar value of the fluctuations, then you can restrict yourself to only looking at it in percentage terms.
There are many different mental strategies to help investors overcome fear and greed. The message is to think about your investments as a long-term strategy that does not get dictated by the short-term situations. It should help us to do less and make more!
DISCLOSURES:
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