Today we live in a world that caters to instant gratification; where people receive a reward or good feeling almost immediately. As a society, we tend to live on our computers, smart phones and even smart watches, receiving an ever-growing amount of information; solicited and unsolicited that can make us feel good, even motivated and more confident.
Sometimes this need for immediacy is justified as not only time saving but as providing access to more information in a timely manner leading to better decision making – just ask Siri. However, while the need for ‘now’ may be instinctive, it can create a predisposition to short-term thinking focusing on the immediate benefits of the ‘a bird in the hand is better than two in the bush’ analogy.
As we know, for one analogy, there is often the alternative and when it comes to investing and managing an SMSF, it may be the tortoise and hare, where ‘slow and steady wins the (long-term) investing race’. You may recall we looked at compounding in an earlier article where we included a simple example of the benefits of starting early and sticking to it.
Let’s take a look at some of the potential downside of a bias to the ‘now’ when it comes to investing and how this bias may be overcome.
Sorry, this content is reserved for members of our SMSF Connect community.
Please register for a free community account to view this content or login below.
Login
If you are an existing member of SMSF Connect, please login below.
If you wish to learn more about joining the community, please click here.
Join the free community
Complete the form below to set up your free account and be regularly updated on SMSF and investing news and information.
Missed an Issue? Catch up on all articles from the SMSF Connect Investment Series below:
Disclaimer: The information contained in this document is provided for educational purposes only, is general in nature and is prepared without taking into account particular objective, financial circumstances, legal and tax issues and needs. The information provided in this article is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to your individual circumstances. While SMSF Association believes that the information provided in this article is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.
Ian Irvine - Guest Contributor
Ian has been a keen investor for over 40 years and can draw on his experiences from both investing on his own behalf and also having worked in financial services for more than 30 years. Over this time, he has seen many changes that impact investors’ attitudes to in what and how they invest.
He started his career in what is now referred to as fast moving consumer goods (FMCG) or grocery, working for an Australian margarine manufacturer. In 1986, he was recruited to Westpac around the time of deregulation of the sector, where he spent 10 years before taking a role at AMP and then with ASX for 14 years up to the end of 2017. He continues to be involved with ASX; working on their educational programs.
In 1996, he and his wife established their own SMSF and again the experience and lessons learned regarding managing an SMSF over the years have provided him with many insights and ideas. He enjoys sharing these with others where these are helpful and always suggest that if an investor or SMSF trustee is unsure, that they should seek appropriate advice from a licenced professional.
Ian holds a B. Com (UNSW), and lives in Sydney and enjoys travelling to and meeting investors and SMSF trustee at the educational events with which he has involvement with from time to time.