The River Flows

🌐 The River Flows

No man steps in the same river twice, for it is not the same river, and he’s not the same man.

No man ever steps in the same river twice, for it's not the same river and he's not the same man.

This quote from the Greek philosopher Heraclitus has analogies in the financial world.

First we'll discuss the quote, although I think you probably get it.

You can get in the river, get out, and get back in a few minutes later. That second entry is into a different river. The water kept moving, so you're swimming in new water, with new fish, sediment, and micro-organisms.

You're different as well. You've maybe dried off a bit. You have new thoughts in your head.

As investors, we too often follow what otehrs have done. We try to pick the next hot stock or sector. Or we try to replicate someone else's real estate portfolio or newsletter business.

Advisors try to tell clients, "just invest in the index. It's worked for this long. No need to evaluate anything else."

Or we think, "the government has always fixed this, they'll do it again."

We always hear past results are not indicitave of future performance, but do we believe it?

More importantly, someone els'e performance isn't indicative of your experience.

It is important to understand past performance of equities, debt, managers, teh economy, various sectors. But equally important to understand why the performance.

It's also important to investigate the current situations which are similar to previous situations.

Sure, the FED has always fixed inflation, but they haven't done it after printing record amounts of dollars, and dealing with huge swaths of world economy choosing to not use dollars.

Sure, the S&P keeps going up and to the right in the long-term, but what if it goes sideways for 3-5 years?

Yes, your brother-in-law mane some money buying rental properties starting in 2012. But how will interest rates, taxes, inflation, affect the future of that business.

You are not exactly like any other investor or worker.

You have different growth, income and expenses. You have a different family. And the economy and geopolitical climate isn't the same.

Everyone should at least have some humility to understand. We've never had this exact situation before, and we'll never be in this exact situation again.

You should plan your financial life for you. Not based on what anyone else has done, or is doing. And re-evaluate as needed. Your situation continues to change, as do your options.

Hopefully you find an adivoar that can understand your situation, your needs, and bring the options that fit you.

The river is always moving.

Have a great week

Adam