SOME PEOPLE SAY I eat like a dog. I eat the same food everyday. For breakfast, I have egg whites with mushrooms on a whole wheat tortilla, and oatmeal with fruit and almonds. For lunch, I have a salad of tomatoes, cucumbers, carrots, avocado and baby spring mixed lettuce, and usually a nonfat bean and rice burrito. For dinner, I have vegetables like broccoli, cauliflower, spinach and squash with fish or poultry. When I feel adventurous, I might have a turkey burger with a little mayonnaise.
My lifestyle generally is just as disciplined as my eating habits. Some people might describe it as plain and boring. I live in the same small condo I bought more than 30 years ago. I drive a 2010 Ford Fusion, which I plan on keeping until it becomes too costly to repair. I exercise every morning, usually at the same gym. I go to bed every night at 9 p.m. and wake up every morning at 4 a.m. Every day, I listen to the same music from the 1960s.
As you can see, I don’t like change and I’m very disciplined in how I live my life. The question I keep asking myself is, why can’t I have the same discipline when it comes to investing? Last year, I wrote in a blog about the four simple investing rules I follow. Rule No. 4 says I control my emotions by tuning out the noise and rule No. 3 says I don’t make significant changes to my portfolio.
Lately, I have done just the opposite.
In 2017, I lowered my stock position from roughly 50% to 25%, plus I made changes in the mutual funds I own. At the time I made these changes, I was losing confidence in the sustainability of the bull market and wanted to reduce my risk. Tomorrow, I will probably have reasons I should make further changes to my portfolio.
Why do I have so little discipline when it comes to investing? I’ve concluded I have a difficult time dealing with things in my life that aren’t black and white. For instance, I feel pretty confident the food I eat are nutritious and are beneficial to my health.
But when it comes to investing, matters aren’t so black and white. What the stock or bond market is going to do tomorrow or 10 years from now is pretty much anyone’s guess. Investing requires faith that what you’re doing today will lead to a successful outcome. Maybe what I need is a little faith.
In the absence of that faith, I’m falling back on a friend. To bring more discipline to my investment decisions, I decided to share my portfolio with a close friend—and to confide in her next time I get the urge to make major portfolio changes.
Dennis Friedman retired at age 58 from Boeing Aerospace Company. He enjoys reading and writing about personal finance. His previous blog was Lessons Learned.