Mesmerized By The Lights

Todd Washburn |

We love bright, shiny objects.  We love bright lights and loud music.  We love food that’s bad for us- but tastes oh so great.  We love to win things- even if most of the time we lose trying.  Yup- it’s State Fair time.  For 10 or so days a world of rides, lights, carnival barkers and food of every kind (take your pick- BBQ, fired dough, NC State ice cream, or – new this year- deep fried key lime bites) pops up in Raleigh.  We flock to it like moths to light.

Why?  What’s the appeal? What compels us to happily part with our hard-earned money for the chance to win an oversized stuffed bear that we have to carry for the rest of the day?  I think it’s because it’s different.  It’s a change from our normal routine.  It’s a once a year chance to just cut loose and misbehave- sort of.

It reminds me some of investing- or people who invest.  We know- I think- that we should build a well-diversified portfolio of low-cost index funds or exchange traded funds (ETFs).  Then, for the most part, leave it alone.  Sure, a tweak here or there, but wholesale changes are few and far between.  But the investing world has its bright lights, loud music and shiny objects.  You can have junk bonds, alternative investments and commodities.  How about variable annuities with all the bells and whistles?  There are tech stocks, individual bonds, and rental properties.  Some of them might make sense for some of us- if we truly understand them.  Most, however, are just distractions- pulling us off our desired path.

We need to fight the urge to buy the “super” investment.  We need to understand how things work, and how we can lose our money.  We need to stick with our veggies instead of the fried dough. Investing- certainly for most of us- shouldn’t be flashy or probably even “exciting.”  It’s a game of blocking and tackling- not Hail Mary passes.

If you’re feeling the urge to splurge- hunting for the next Amazon or Facebook, or to buy Bitcoins or pork bellies- do yourself a favor.  Go to the fair.  Ride the rides, try tossing the ring over the bottle neck, and eat way too much fried food.  Get it out of your system there.  After all, it’s better to have to carry a stuffed bear than get eaten by a market bear.