The Investor's Challenge: Making Peace With Doubt and Disappointment

Aug 3, 2020

In James Clear’s powerful book, Atomic Habits, he recalls a conversation he had with an elite weightlifting coach. Clear asked him, “What’s the difference between the best athletes and everyone else? What do the really successful people do that most don’t?”

After mentioning several factors Clear expected, such as genetics, luck, and talent, the coach added one Clear didn’t expect: “At some point it comes down to who can handle the boredom of training every day, doing the same lifts over and over and over.”

This notion of doing the work — of patiently working a plan and taking the right steps every day, even when you don’t want to, and in the face of a culture that is all about instant results — is how all great successes are achieved.

It’s how businesses succeed. In his book, Good to Great, Jim Collins likens working a plan to turning a huge, impossibly heavy flywheel. At first, it takes every bit of effort to get it to budge. Eventually, you get it to make one rotation. As you keep pushing, in the face of a chorus of naysayers and your own doubts and disappointing setbacks, eventually it gets easier. But it takes time.

It’s how marriages go the distance. Our own selfishness that gets revealed along the way isn’t pleasant. We start to understand what Gary Thomas meant when he wrote in Sacred Marriage that marriage isn’t for our happiness; it’s for our holiness.

It’s how a life of faith is lived. You don’t even have to read the books, A Long Obedience in the Same Direction or Faith is Not a Feeling, to understand their messages.

The daily work of investing

What does this have to do with managing an investment portfolio? Quite a bit.

Even if we’ve done everything right, choosing an investment strategy that’s driven by a time-tested, objective process that we fully understand and agree with, there will be moments of doubt and disappointment. The strategy won’t work as well as we expected one month (or one year!). It will tell us to make a change that doesn’t feel right. We’ll hear of “can’t miss” investment ideas from friends or neighbors and feel tempted to make a change.

What we do in those moments can make or break our success. Battling against the urge to act because of doubt or disappointment is the investor’s equivalent of an athlete battling against boredom.

No investor will always get in at the very bottom or get out at the very top. And that leaves lots of room for doubt and disappointment to enter in. The key is learning to live with such feelings. To accept good gains when we know there could have been even greater gains. To accept some bad stretches on the way to good long-term results. To take satisfaction from having a system that objectively tells us what to do instead of riding the stressful roller coaster of making every buy and sell decision based on our own intuition or some other subjective decision making factor.

The daily work of investing isn’t done in a gym. It’s done in our hearts and minds. And very often, it’s about resisting an urge to act fueled by doubt or disappointment. When we say that investing is simple but not always easy, that’s what we mean.

James Clear says, “We get bored with habits because they stop delighting us… And as our habits become ordinary, we start derailing our progress to seek novelty. Perhaps this is why we get caught up in a never-ending cycle, jumping from one workout to the next, one diet to the next, one business idea to the next.”

Clear’s conclusion? “The only way to become excellent is to be endlessly fascinated by doing the same thing over and over. You have to fall in love with boredom.”

I’m not sure whether it’s possible to fall in love with the feelings of doubt or disappointment. But I know it’s possible to come to expect them. And when we expect them — when we can experience those feelings and simply remind ourselves that they come with the territory of investing — that’s when they lose their power to pull us off course.

Written by

Matt Bell

Matt Bell

Matt Bell is Sound Mind Investing's Managing Editor. He is the author of five biblical money management books and the teacher or co-teacher on three video-based small group resources. His latest book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management, will be published by Focus on the Family and its publishing partner, Tyndale House, in April 2023. Matt has spoken at churches, universities, and conferences throughout the country and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.