Dealing with the "what ifs?" - psychology of committing to an AA

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
Posts: 781
Joined: Thu Mar 08, 2012 7:31 am

Re: Dealing with the "what ifs?" - psychology of committing to an AA

Post by windaar »

For me AA is less about projected return than about keeping me from selling during or after a correction/crash. I just accepted JB's "age in bonds/fixed" years back and I've been at peace since then. That matched my risk assessment. Many prefer "age -10 in bonds/fixed." During flush times posters here brag about how heavy they are in equities; in 2020 you could see many such investors dropping like flies and pulling the plug at the worst possible time.
Nobody knows nothing.
User avatar
Posts: 2618
Joined: Thu May 20, 2010 1:22 pm

Re: Dealing with the "what ifs?" - psychology of committing to an AA

Post by mmmodem »

jadela wrote: Tue Jun 21, 2022 10:44 pm I know this is not a helpful place to be, and resolving this mental pattern would help both my investing career and life overall, so I would appreciate any insights you all have here.
I heard this on the radio today so thought I might pass it on to you. Let's transport you to the future 20 years from now and look back on this decision. At 56, what decision made would've made you proud of yourself back when you were 36?

Looking back at my AA decision, at the beginning of my journey, I did not choose the optimized path. In fact, I did not even stick to my AA. I didn't stick to the glide path that I set as I aged. You know what made me proud? I stayed the course. I continued to invest despite multiple downturns. I lived below my means so that I could invest something every paycheck.
Posts: 31
Joined: Tue Apr 19, 2022 4:15 am

Re: Dealing with the "what ifs?" - psychology of committing to an AA

Post by kvdecide »

jadela wrote: Tue Jun 21, 2022 10:44 pm Context: I'm 36, developing my IPS, and trying to find an AA that I can commit to and stick with over the next ~30 years until retirement. My current portfolio value is ~$328k, invested in TSM index.

Observing my history, I tend to agonize over big decisions. Once I commit, and really feel like I understand and accept what I'm committing to, I'm good at staying the course. But often the process of getting to that decision involves a lot of overthinking and likely excessive analysis. I see this happening now. I've read like 5-6 of the top books, listened to tons of podcasts, and countless BH forum posts at this point. I feel like I'm going a little bit crazy from trying to make sense of all the different arguments in the info I've consumed. Historically how this pattern resolves for me is I do this, drive myself a bit crazy with all the info, get sick of it, put it all away and then a little while later my answer just comes to me. ¯\_(ツ)_/¯ I''m sure there's a healthier or at least less stressful approach.
When I read that above paragraph, I thought someone was writing about me. I am exactly the same way - particularly in "let the decision come to me" part. I delay action until the decision comes to me - therefore end up acting late!

I find solace in hedging. In your case, you have identified three approaches. And your quantum is 328k. The only way I see you dealing with the psychological what-ifs is if you divide your quantum equally across those three approaches.

Financially, I am not sure if that makes sense - as there may be a lot of overlap amongst the three approaches. But psychologically, I always found solace in participating in all the approaches, albeit with a smaller quantum.
Topic Author
Posts: 113
Joined: Mon Apr 06, 2020 12:32 pm

Re: Dealing with the "what ifs?" - psychology of committing to an AA

Post by jadela »

Thanks. It's comforting to know I'm not the only one whose mind has a tendency to do this.

The feedback here has been extremely helpful in helping me to see where I have been getting in my own way.

As may have been apparent in my responses above, this really brought me face to face with self-generated anxiety around trying to perfectly plan and control for an unknowable and uncontrollable future. Specifically, I was operating as if several things were true that are not, or places I was lacking perspective:

- I do not have "one shot to get this right" (I confused developing conviction around my allocation with this—especially any tilts, as all the guidance I've read that if you're gonna tilt you gotta stick with it.) This can and will evolve over time.
- what matters most for my future wealth is being in the market and in equities, much more so than how I am diversifying the equity pie
- what actually matters (and I can either control or influence) is my savings rate / expenses, my career and income, and being invested for the long haul. I was looking to potential returns to do too much work for me and getting very anxious / hung up on maximizing the return, which coupled with point 1, got me into a place where I was in analysis paralysis trying to a priori find the perfect portfolio. Add to that the fact that I have literally zero control over what the market does and it's a perfect recipe for the rabbit hole I just went down.

On top of all of that, it wasn't fun. Stimulating/engaging yes, enjoyable no. I noticed over the last week that I wasn't really present for the people and some important moments in my life that I won't get back, that we're *actual* one shot opportunities. All that obsession and research trying to maximize some potential financial upside, optimize, predict, and control the uncontrollable robbed me of the actual upside: living my life. (I'm on an amazing trip with friends and was very preoccupied and robbed myself of some wonderful parts of that experience. I was thinking about this stuff all the time and not enjoying my friends, and making myself feel very anxious.)

Suffice it to say, Bogleheads, lesson learned. I get it now. I'm in. Good enough is good enough, time to move on.
Last edited by jadela on Thu Jun 23, 2022 6:55 am, edited 2 times in total.
User avatar
Posts: 48400
Joined: Thu Jan 10, 2008 12:56 pm

Re: Dealing with the "what ifs?" - psychology of committing to an AA

Post by retiredjg »

Good for you! It does sound like you've "got it".
Post Reply