Ignoring Waze is Not Good Investment Policy

Waze is a popular navigation app

Waze is one of the best satnav apps out there. Whatever magic they do to monitor traffic gets you where you want to go in the most efficient way. The big computers in the sky know it. We know it. But we all ignore Waze from time to time too. Be honest? has it ever been a good idea?

Following Waze is boring. It can make us comfortable, yes, but it can also frustrate. The level of frustration grows with our own knowledge. Familiarity with the area, or roads, makes us think we know better. We have to, right? Waze is only a computer. We have years of experience.

Following Waze can also make us feel like we're not doing anything. This feeling is especially dangerous in traffic. Waze tells us to stay on the highway, but we know some back roads. Is it ever faster on those back roads? Nope. But how many times do we tell ourselves we feel better because at least we're, "doing something?"

We're not following Waze here, but you know I'm going somewhere with this.

Right now the global economy is in a massive traffic jam, literally & figuratively. Global trade is jammed up by COVID lockdowns in China, blockaded ports in Ukraine, etc. Stock and bond markets have lost value - at the same time. The Fed is telegraphing further action, but there's little agreement on their success.

We want someone to tell us what to do. Above all, we desperately want to do something.

Stop.

Check the Waze.

What does your investment policy tell you to do? Stay on the highway? Maybe it actually says to take the back roads. Hopefully it doesn't say, "just do something." As Jack Bogle famously said, "don't do something, just stand there!"

So often we know exactly what we should do, but we do something else instead. Stress is a great motivator, but often not a healthy one. Everyone reading this right now, whether they know it or not, is operating on an elevated stress level. Stress is bad for investing. Doing, "less," is often good for investing. Like the possibly apocryphal study showing dead investors outperforming the living, less is more.

I feel like my mantra is, "I can't predict the future," but I do know that we're in some kind of transitional period. Economic, health related, political, it's all there. Are fortunes made during transitions & upheaval? Yes. Are fortunes lost during those periods? Also yes. Fortunes made and lost as if on the flip of a coin.

If the goal is to make a fortune, more power to you. If the goal is to create a retirement - whatever you want that to be, the prudent course of action may be to follow the Waze.