Force for thought — 15.11.24

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

What if we could go back to the future? In 2014, a series of four virtual reality experiments simulated an environment where participants could interact with their future selves. The aim? To determine whether, upon interaction, participants may allocate more monies, and gear their decision-making, towards future rewards. The study noted: “to those estranged from their future selves, saving is like a choice between spending money today or giving it to a stranger.” That paints a bleak but realistic portrait of many individuals who, short of accurately envisioning their futures, fail to successfully invest. So, what happens when humans connect with their future selves, not arbitrarily, but in real time? Unsurprisingly, when participants engaged with age-progressed renderings of their older selves, any sense of estrangement collapsed. Instead, they demonstrated an overall inclination to suspend immediate rewards in order to delay their enjoyment in the future.

So, how can we apply these findings to our own investing? All individuals, to varying degrees, suffer from a tendency to think in the short-term, diminishing their abilities to hold onto their investments long enough to allow them to compound. Even though we know time is money, we tend to prioritise our immediate needs rather than the needs of our future selves because they are both unseeable and unknown. Who can blame us? However, if we know — and the research assures us — that our connectedness to our future selves is fraught, we need to put systems in place to insulate our older selves from myopic, wastrel investment behaviour. By implementing a feedback system like Force500, which effectively tethers investors to the future by anchoring them to incremental, routine and positive messaging now, we can maximise the likelihood of safeguarding an investment — so that with time onside, it may bear an abundance of fruits in the future.

To Have on Hand

“We need the resilience to deal with the only constants of each day — ambiguity and change.” In the face of uncertainty, it’s understandable why short-term thinking may seem attractive to us. If we can’t predict the future, why not exclusively focus on now? Susan David, author of Emotional Agility, would argue otherwise; coping today is no guarantee for tomorrow, so we ought to develop a tool belt for life.