What’s your reaction time?

Dominic Thomas
Jan 2025  •  3 min read

What’s your reaction time?

Those who know me, know that I struggle with fairness. I don’t like unfairness of almost any type. My inner child is petulant, often easily triggered by things that I disagree with. I feel it and the response in me is often almost instantaneous. This isn’t limited to the world through the lens of television or monitor, but leaks into very basic mundane tasks like a simple trip in the car.

I have acknowledged this problem and have spent years working on myself. It took longer than I would have liked to leave the world of Twitter and much social media. There was a sense of community with my peers within the financial planning space; we would share ideas and concerns, helping us all become better at what we do for our clients. However, within the same space, it seemed largely irrelevant how many filters were selected, there were countless issues and opinions designed to trigger, agitate and frustrate; to cause grief and angst. To divide.

So I left. Several months ago, very rarely looking back. Today neither my PC nor phone retain memory of my presence there.

There is a lot to trigger most of us, most of the time. There is a balance between engagement and disinterest. It isn’t always clearcut. Your opinions and beliefs are nothing more than opinions and beliefs. Facts are facts yet seem skewed and interpreted, reframed and deflected to suit a particular previously held belief.

We can argue about almost anything and despite the lessons from history, we seem determined to repeat making the same mistakes. On the one hand, it doesn’t matter what the topic is -American politics, a war somewhere that is being forgotten as lives are destroyed, an Olympic event or ceremony, a celebrity, the billionaire, immigration, monarchy, the poor ‘working’ class white male, or your politics of the day. These things trigger each of us very differently.

A few months ago in my bubble of sector news, I read the headline: “Reaction as inflation rises for the first time this year”. This was from Money Marketing magazine. I assume the editor really knows that this is wrong on various points:

  • Inflation means prices are rising
  • They mean that the rate of increase has increased (it was still inflating)
  • My reaction to it or anyone else’s is largely after the event, but of course this is designed to arouse a sense of greater anxiety, in an already uncertain world

The article went on to quote reactions and ‘research’ that half of investors believe that inflation will rise again over the next six months (frankly about as useful as a coin toss, half do, half don’t). Anyone who has paid for a holiday or hotel or a theatre ticket, will know that prices have risen… is it coincidence that your flights and holidays were booked during the time of “rising prices”?

We know inflation is a big deal. It erodes the value of your spending power. Hence why you invest in real companies, making and providing real things with a future. One of my peers calls most of the financial news “financial porn” which seems fair. A lot of people are addicted to stuff that doesn’t serve their own wellbeing. In fact, it’s largely detrimental.

We could all do with pausing for thought a little more. Whether consuming what is often described as ‘news’ or scrolling through social media or driving your car and getting stuck in yet another over-managed section of roadworks. We don’t need the reaction times of a motor racing driver; we have our own goals and plans and shouldn’t be swayed by the agenda of others.

What’s your reaction time?2024-12-20T11:07:23+00:00

The Vacationers’ Guide to Investing

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Here is another good piece from Jim Parker over at Dimensional.

Two colleagues went on vacation separately. One had a great time. The other had a miserable experience. Their respective stories provide valuable lessons, not just about taking a holiday, but about investment.

Frances booked a beach house up the coast for a week. Brian opted for six nights of bush walking through the mountains. Frances returned to work, rested and recharged. Brian came back a jibbering wreck. What happened? Brian is a last-minute kind of guy. He’d heard about outdoor excursions from a stranger and decided on impulse to book a rugged ‘alpine adventure’. The problem was his urgency left him little room to negotiate over price or service. And the package he chose was not the one his acquaintance had recommended.Jim Parker

Brochures of Promise

The brochures promised sunlit vistas and invigorating nights in the open under canvas. But the weather wasn’t kind. It rained every day. Brian’s hired gear, which he’d organised at the last moment, was inadequate. His shoes fell apart, the tent leaked and he, quickly discovered, he hated bush walking.

It rained on Frances’ holiday, too. But she hadn’t invested all her expectations into lying on the beach. Anticipating all climates, she’d packed books to catch up on, along with a painting kit, crossword puzzles and a guide to local galleries and cafes. Having planned her vacation months in advance, Frances also had had a chance to think about her desired end experience. It wasn’t so much the beach she was looking forward to. It was the solitude, and quiet and chance to refocus. Frances had taken advice about the holiday from a friend who had known her for years, understood her tastes and values and knew her tolerances.

Brian, on the other hand, was so focused on someone else’s vision that he had no idea what he was trying to achieve. The advice he received was from a complete stranger and he had never really articulated to himself the goal of his trip. His impulse-buying meant he had spent too much on an experience that wasn’t right for him anyway and which left him no control or choice over his destiny.

Planning ahead

The point of this story is to show that investing is a little bit like planning a vacation. There are always going to be things outside your control, like the weather. But you can mitigate that by packing well and diversifying your activities. Not doing it all on impulse or at the last moment gives you more flexibility around cost and design. And thinking clearly about who you are and what you are trying to achieve lessens the chance of taking inappropriate risks.

Seeking counsel beforehand is best done through someone who knows you, understands what you value and appreciates what you are prepared to risk. Most of all, like most things in life, the journey and the destination shouldn’t really be separated. Where we are trying to go through investment and how we are trying to get there are often one and the same. Once we understand all that, holidays (and investment) can be much more successful and much less stressful.

Jim Parker: Vice President Dimensional

The Vacationers’ Guide to Investing2025-02-03T14:16:28+00:00
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