Force for thought — 04.10.24
To Have and To Hold
How do you hold onto a good thing and not let it go before it has time to work its magic? By mobilising a method that works. No one is insulated from the challenges of sticking with something promising — not a diet, nor an exercise regimen, or even a first date — the moment it becomes uncomfortable and hard. Why should investing be any different?
We’ve collected more than four million data points that demonstrate how a particular methodological communication enables investors to hold on for the ride. The proof stretches beyond investing: our ability to hold on when we least want to — in order to withstand things that can cause our undoing — has application everywhere. Each week, we’ll show how and why a mechanism for holding on, in investing and in life, is so powerful.
Zooming in
If someone asked you to identify an intrapersonal prospective empathy gap in your behaviour, could you do so? It’s certainly a mouthful, but what does it mean? This gap represents our inability to effectively predict our future behaviour from where we currently stand. A common example is grieving: when we’re in the thick of it, it’s hard to see a way out; to imagine ever feeling happy again. Take the Predicting Hunger study, conducted in 1998, where participants were faced with making healthy (fruit) and unhealthy (chocolate) food choices within immediate timelines and in advance. Even though their appetites influenced their decision-making, the study showed that while participants opted for healthier snacks when thinking in advance (perhaps they believed: “future-me will nourish myself”), they were nevertheless tempted by unhealthy snacks when faced with immediate satisfaction, unconcerned with future consequences.
What does this tell us? This gap highlights that when it comes to safeguarding our future interests, humans are fundamentally disadvantaged because it’s hard to picture the future from where we stand in the present. Even if we want to protect our future selves, we often fail to do so appropriately and give in to a primitive path. To overcome this gap, we need to implement routine, positive and proactive reinforcement — like Force500’s feedback system — to make our journey more manageable but also to optimise the rewards we reap when we ultimately reach our destination. Given we are susceptible to poorly predicting our futures until we get there, having a system in place to hold on to, and that anchors us to what we can control now, is not only immensely helpful but essential.
To Have on Hand
“Even when you’re dealing with the real world as it really is, you have enormous leeway in how you respond to it.” In her book, Emotional Agility, Susan David, a Harvard Medical School psychologist, focuses on the destructive nature of unhelpful thought patterns and what we can do to break them. Why? Because she knows what the S&P500 tells us: too many individuals stand in their own way, short-circuiting their success, but it doesn’t have to be so.