Self-reflection is an activity that seems unrelated to finance. But markets taught me a lot about looking within myself. When investment performance is not as desired, we blame CEOs, politicians, other countries, other investors, financial professionals, and just about anything we can fixate our brains on. Blame is much easier than responsibility. But it is usually our own fault. Unpreparedness, disorganization, lack of knowledge, and, most affectingly, fear-driven conduct drive our portfolios. And it is no different in our lives.
When we do not like something, we point the finger. When we are unhappy with a significant other, friend, coworker, or anyone, we rarely realize it as an opportunity to self-reflect. We are so used to labeling the problem as external, but where has that gotten us? Our perception of other people’s behavior is nothing more than a commentary on ourselves. When we find ourselves unhappy with someone or something (whether a colleague or current event), we can get upset or we can recognize that our perceptions are not reality; our feelings, expressed as blame, have nothing to do with their intended target.
Like markets, the world and its people will not always behave exactly as you desire. It is self-centered to think otherwise. And even though it may seem so in your mind, this is not a game where you fault others without first looking in a mirror. The stakes are too high to be selfish: This is real money and real life where consequences matter.
Markets taught me that breaking the self-centered habit and instead opting for self-reflection will do wonders for your portfolio – creating opportunity and reducing risk. Similarly, looking inside yourself will resolve the headaches of your life in ways blame can never deliver.
Evolution gave us the ability to self-reflect and markets teach us what to do with it. If we are wise, we can use this tremendous gift to improve our lives and this world.