I recently heard about a toddler who mistook his book for an iPad. He was found, a little frustrated, trying to ‘zoom in’ on the paper page.
Many of us are accustomed to using the zoom tool to magnify text on a phone or iPad. Like the toddler, we often use it as a tool to see things more clearly, to take a closer look.
The zoom function is an indicator of how intuitive today’s technology has become, but it also reminds me of a habit that many new investors are prone to – namely that of ‘zooming in’.
‘Zooming in’ can refer to getting caught up and overly concerned with the day-to-day (month-to-month, or even year-to-year) fluctuations in financial markets.
We can zoom in to watch eagerly as volatile prices rise and fall. We can listen to news reports about interest rates, or current and future events that might affect our investments. We can wait anxiously for the next big change or announcement, hoping to make the right decisions based on likely outcomes.
When we zoom in, we may think we’re getting a clearer view, but most of the time, we’re just caught up in short-term thinking.
As investors, a more fruitful tool is our ability to ‘zoom out’.
Peace of mind as an investor can come from choosing our perspective – knowing that the way we look at a situation can affect how we feel, and if or how we respond to events – even how we choose to spend our time (e.g. fretting over volatile markets or spending quality time with family and friends).
In short: perspective matters.
You can change your perspective when you need to. So next time a market dips, or even plunges, remember to take a broader perspective and ‘zoom out’. (Just make sure it’s not on paper.)
If you need a fresh perspective on your financial future, contact the team at Align Financial on (02) 9913 9995.
