Friday, June 10, 2011

You don't have to act on every impulse

I got on the elevator this morning after buying my Cherry Coke Zero, the lifeblood of my workweek, at the canteen store in the sub-basement. Another woman gets on. I'm standing in the elevator operator position so I say ask her which floor she wants to go to. She says "lobby". Because our building's elevator software is programmed to always stop on the first floor, instead of pressing the 'L' button, I said "oh, ok. We'll hit that on the way up."  All of the elevators are programmed that way. It is inconvenient, but everyone knows the deal. I think she felt slighted that I didn't act on her request, so instead of just trusting me that the elevator would stop where she wanted, she reaches over to push the button. But it was too late, we were already there, the doors were already opening. Just as I said they would. I think it was less about being correct than it was that my response didn't meet to her expectation that I would act on her request.

This interaction got me thinking - a lot of people demand action. The economy's bad, do something! $787 billion stimulus didn't work, do some more! Oh shit, my portfolio is down 30%, these stocks are no good, I need to sell them!

But that's not the case. When things are happening, you don't have to participate, especially with investing. Sometimes the best course is inaction. If the pain is too unbearable, don't log into the accounts, throw away the monthly statements unopened. By all means, know what's going on with the companies you invest in, but ignore Mr. Market. You don't have to trade with him.

The point is, if you become aware of some of our tendencies as people that you can correct those behaviors. So don't automatically call for something to be done just because you perceive there to be a problem. A lot of the time, things resolve themselves.

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