Successful Investment Means Learning the Art of Letting Go

In many areas of life, intense activity and constant monitoring of results represent the path to success. In investment, that approach gets turned on its head.

In fact, for investing, someone who constantly goes in to adjust, tweak, manage or change their investment options is the biblical equivalent to one who is too anxious over too many things, a busybody and one who ignores wise counsel.

“Through insolence comes nothing but strife, but wisdom is with those who receive counsel” (Prov. 13:10, NASB).

The advice to heed here is this: The busier we are with our long-term investments and the more we tinker, the less likely we are to get good results.

That doesn’t mean, by the way, that we should do nothing whatsoever. But it does mean the culture of busyness and chasing returns promoted by much of the financial services industry and media can work against your best interest.

Investment is one area where constant activity and a sense of control are not well correlated. Look at the person who is forever monitoring his portfolio, who fitfully watches business TV or who sits up at night looking for stock tips on social media.

As followers of Christ, we are taught to let go of factors over which we have no control and instead understand that God is over all as He directs our path. Likewise, when you plant a tree, you choose a sunny spot with good soil and water. Apart from regular pruning, you leave the tree to grow.

But it’s not only biblical philosophy that cautions us against busyness. Financial science and experience show that our investment efforts are best directed toward areas where we can make a difference and away from things we can’t control.

So we can’t control movements in the market. We can’t control news. We have no say over the headlines that threaten to distract us. But each of us can control how much risk we take. We can diversify those risks across different assets, companies, sectors and countries. And we can exercise discipline when our emotional impulses threaten to blow us off-course.

These principles are so hard for people to absorb because the perception of investment promoted through financial media is geared around the short-term, the recent past, the ephemeral, the narrowly focused and the quick fix.

What’s more, we are programmed to focus on quirky risks—like glamour stocks—instead of systematic risks, such as the degree to which our portfolios are tilted toward the broad dimensions of risk and return.

You see, much of the media and financial services industry wants us to be busy about the wrong things. A great example of this is Martha, who was so busy planning a party that she forgot who the guest of honor was:

“But Martha was distracted by all the preparations that had to be made. She came to him and asked, ‘Lord, don’t you care that my sister has left me to do the work by myself? Tell her to help me!’

“‘Martha, Martha,’ the Lord answered, ‘you are worried and upset about many things, but only one thing is needed. Mary has chosen what is better, and it will not be taken away from her'” (Luke 10:40-42, NIV).

Financially speaking, the emphasis of busyness is often on the excitement induced by constant activity and chasing past returns, rather than on the desired end result.

Instead of anxious worry, set the proper conditions through a diversified, disciplined, nonemotional strategy by counsel that does not listen to the blaring bullhorn of the market. Listening to fearmongers only brings more chaos, and we need to remember that our God is instead a God of order (1 Cor. 14:33).

Guy Hatcher, known as the Legacy Guy, has spent his lifetime helping families plan their legacy. His latest book is Your Future Reflection: How to Leave a Legacy Beyond Money. Follow him on twitter at @guyhatcher.