Why Faith in the Future Is Essential for Long-Term Investing
Key Takeaways
- Successful long-term investing requires faith that the future will improve, even during difficult times.
- Market declines are temporary, but human innovation and connection continue.
- Short-term headlines often create fear that can derail long-term plans.
- A disciplined investment philosophy helps you stay focused on your financial goals.
Facing the Future
People often face their worst fears, not because they want to, but because it's part of being human.
They keep moving forward.
The driving force is often faith in the future.
It is the belief that tomorrow can be better than today.
Without that belief, even small problems can feel overwhelming. The world will always have challenges, but we move forward because we trust that better days are ahead.
Think back to one of the hardest periods in your life.
You probably remember finding a way through it.
I certainly do.
When my fiancée broke up with me, I felt completely lost.
I had recently moved from Texas to San Francisco. I had invested so much time in our relationship that I hadn't built a local support network. Suddenly I felt emotionally crushed and completely alone.
Work became my only distraction. Every morning I walked through empty streets to the office.
But I kept going.
Little by little, joy returned.
Deep down, I believed things would eventually improve.
That was my faith.
And it proved to be true.
Success in the Long Run
Long-term investing requires the same mindset.
We often cannot see how things will improve.
We simply believe they will.
Historically, broadly diversified stock portfolios have produced strong long-term returns, even though short-term results can vary dramatically.
Daily market movements are unpredictable.
Long-term economic growth has been remarkably resilient.
That's why successful investors focus on decades, not days.
Why Should We Have This Faith?
My investment philosophy comes down to three simple ideas.
- Humans are naturally social. We seek relationships and connection.
- Businesses exist to serve those relationships. Companies create products and services that help people live, work, and communicate.
- Owning companies around the world allows us to participate in that long-term growth.
Our faith isn't blind optimism.
It's based on our understanding of human nature.
What Should We Have Faith In?
I believe there are two enduring truths.
- People will continue to seek meaningful human connection.
- Businesses will continue finding ways to serve those needs.
Whether you approach life from a religious perspective or not, our desire for connection is undeniable.
Think about your grandparents.
Your parents.
Your own experiences.
Technology changes.
The world changes.
Human nature changes very little.
"But This Time Is Different..."
Every market crash feels different.
And in many ways, it is.
Mark Twain famously said:
"If a cat sits on a hot stove, it won't sit on a hot stove again. It won't sit on a cold stove either."
Market declines are similar.
The causes change from one cycle to the next.
If investors recognize the same warning signs, they often react earlier, changing the path of the next decline.
But through every recession, crisis, and bear market, one thing has remained remarkably consistent:
People continue living.
They continue connecting.
They continue building businesses.
Even during COVID-19, one of the strongest desires people expressed was simply to be together again.
What Gets in the Way?
Unfortunately, fear is profitable.
Two groups often benefit when investors become emotional.
- Wall Street, where frequent trading often generates more fees.
- Financial media, where dramatic headlines encourage viewers to keep watching.
Both can create pressure to "do something."
Sometimes, the best decision is doing nothing at all.
Here's the Good News
When you have faith in the future, you don't need to worry about winning every day, every month, or even every year.
Instead, you can focus on building a diversified, long-term investment strategy that supports your financial goals.
The objective isn't beating the market.
The objective is funding the life you want to live.
Your goal is to live your Best Financial Life.
Now that's something worth believing in.
- Do you have questions about protecting yourself during uncertain times?
- Are you wondering whether you're making the right financial decisions?
I'm here to help.
To share your comments, send me an email at Joe@BestFinLife.com.
Ready to improve your financial life? Schedule a complimentary virtual conversation here.
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