My Uncle Thinks I’m An Idiot. Here’s to Proving Him Wrong.
Short selling vs long term investing.
I come from a genetically-blessed family. For one thing, they packs a lot of smarts.
Like my uncle. He’s a former engineer with a genius IQ. He’s built rockets, satellites, and probably aced Trig. He’s the Thanksgiving devil’s advocate, and he’s a wizard at dismantling half-assed opinions.
Couple months ago, I walk into the living room of my uncle’s house and tell him I’ve been investing. He asks my strategy.
“I’m investing in 25+ for the long-term,” I say. “Five years or more.”
His eyes bulge. My uncle goes on to spend the next five minutes attempting to convince me what a truly terrible idea that is.
I’ll be honest — I don’t remember the details. Frankly, I was shocked. Again and again, history has proven that buying and holding stocks for the long-term is a strong money-making strategy. Long-term holds + diversification = what 401ks are built on.
Since our county endorses the buy-and-hold strategy, why not my uncle, who is totally intelligent enough to recognize the upsides?
My uncle ends the conversation with the caveat he isn’t against investing, per se — just my investing. After all, he’s bought, flipped, and profited off his own fair share of stocks.
I retreat from the living room red-faced yet thoughtful, though no less certain of my position. I’ve done the research. I know my strategy to be valid.
Then, why doesn’t my uncle approve?
I have a theory. My theory is this: for my uncle, the opportunity cost for buying and holding many long-term stocks is greater than the potential upside of shorting the market.
In other words, he’s convinced he can make more money shorting the market — or otherwise — than by buying and sitting on a diversified stock portfolio.
And ya know what? He may be right. If anyone can predict and time the market with enough precision to make bank, it’s him. He’s got the smarts, the capital, and the specialist knowledge to potentially leave my slow-starter buy-and-hold strategy in his space dust.
I, on the other hand, scraped by geometry, boast less than a year of savings, and specialize in the unprofitable art of doodling stick-figures on Microsoft Paint.
Either I am woefully overestimating my investment savvy (#secretgenius?) or there is a fundamental disconnect between how my uncle and I approach money-making.
For now, I’m sticking to my guns and relying on resources like The Asshole Who Had a Point and this WaitButWhy post on building self-awareness to keep myself honest.
Sometimes, what’s best for folks like my uncle ain’t what’s best for me.
I’m hoping my uncle doesn’t still think I’m being an idiot. But if he does…here’s to proving him wrong.
Cheers.
