Habits Make The Investor

We determine our outcomes by having constructive behaviors.

@KetoAurelius put out the following list of habits/behaviors that he believes are crucial (I provide definitions for the couple that may not be obvious);

  • Ketosis (metabolic state where the body burns fat, not sugar by virtue of a low carb diet)
  • Stoicism (philosophy from which I take to not worry about things beyond your control and avoid big emotional swings)
  • Fasting
  • Self control/Discipline
  • Meditation
  • Weightlifting
  • Reading daily
  • Cold showers (several health benefits including lengthening telomeres)

There is both overlap and direct ties in this list with attributes needed for successful investing. I would define successful investing as the outcome of having enough money when you need it. People who have an adequate savings rate, a suitable asset allocation and avoid repeating activities that permanently impair their capital have a good chance of having enough when they need it and a list like this helps with repeating bad, self-destructive behaviors.

The entire list is comprised of behaviors that I believe make life easier and will contribute to investing success. Ketosis, fasting (I follow a 16:8 fasting eating routine, I essentially skip breakfast), weightlifting, cold showers and maybe meditation (I don't do those last two) are intended improve physical health (I believe ketosis, fasting and weightlifting are crucial). When you employ the discipline that these require, I would argue it makes it easier to employ the discipline that investing requires. You define an investment process for yourself that you feel is best at a time when emotions are not escalated and then you need discipline to stick to it when it is most difficult.

Additionally, habits that are intended to improve health will save us money throughout life. People spend thousands every year on medication for chronic maladies. No absolutes of course, but in many instances chronic maladies can be avoided and even reversed, saving thousands, maybe hundreds of thousands, which connects directly to retirement planning.

Stoicism, self control, meditation and reading are intended to improve the mind by calming it and learning. We know we have no control over what the markets do, so worrying about what markets do becomes wildly unproductive (stoicism). Your investment process, no matter what it is, should address market cycles in such a way that stress is lessened. If you're stress is lessened then you'd be less likely to sell in a panic (self control). Learning more by reading and calming the mind make this easier still.

The list is not totally complete insomuch as no list like this ever is, but it is a very worthwhile set of habits to incorporate into your lifestyle. I would add having a dog, spending time in nature, having various and unrelated interests, trail hiking, actively volunteering and finding some sort of creative outlet (for me that's photography). Again, that's just a list, it's not exhaustive.

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