Over Time, You Will Learn New Things – Investing in 12 Pictures

Both knowledge and behavior play key roles in the investment process. Read on to learn more!

Back in 2014, Carl Richards at Behavior Gap was gracious enough to share twelve of his best graphics with anyone who wanted them for absolutely no charge. His hope was that financial advisors could take these images and use them to convey the importance of using a disciplined process to reach your investing goals.

I've taken Carl's images and used them to explain how to systematically approach investing based on these twelve pictures. Hopefully, they will help at least one individual take the necessary steps to reach their personal, professional, and financial goals.

Without further ado, picture number five . . .

Over Time, You Will Learn New Things

If I were only as smart as my kids think they are . . .

It is a rare individual that starts on day one of their investing journey and has all the requisite knowledge to implement their ultimate investment strategy.

In fact, even those WITH ALL the knowledge find that, over time, what they thought they knew they actually do not. That is because investing is not just about the rational, but it is also about the emotional.

The “circle of wisdom” illustrates two very important points:

• What we know at any point in time influences our behaviors.
• Our behaviors allow us to obtain new knowledge about how we deal with investing.

Over time, each of us will face new challenges, have new experiences, and establish different priorities. These events will influence our perception of the world. These events will shape how we perceive our investments.

While there are fundamentals in the investment world (risk, return, asset allocation, etc.), there is also the undeniable presence of a behavioral aspect when it comes to investing.

This week’s picture illustrates that both knowledge and behavior play key roles in the investment process.

Every investor needs to recognize and understand the importance and influence of both factors and—as the graphic points out—ensure that they are used together to deliver wisdom.

Each month, for the next twelve months, I will be publishing another picture to help people understand the investment process.

If you have any questions about the topics covered in this post, feel free to reach out to me at any point in time. At F5 Financial, we enjoy working with entrepreneurs, corporate executives, and families to define their goals and make sure they have plans in place to execute and achieve those goals.

Investing in Twelve Pictures - Previous Posts:

• Picture 1 - You Have to Start with a Goal
• Picture 2- You Need to Focus on What You Can Control
• Picture 3 - The Best Solutions Are Simple
• Picture 4 - It's NOT a Plan—It's a Process!

Would You Like More Support?

• Do you have a well-defined Investment Policy Strategy that is used to drive your investments in support of a comprehensive financial plan?

• If not, would you like to partner with someone who is used to helping people get through these struggles and (then, with confidence) implement portfolio strategies in a systematic manner while focusing on your desired outcomes?

If so, feel free to send us an email or give us a call. We’d love to have the opportunity to help you find a bit more peace of mind when it comes to investing.

Illustration credit: Carl Richards (Behavior Gap)