Stop looking for shortcuts

Posted by TEBI on April 23, 2024

Stop looking for shortcuts





It’s human nature to seek shortcuts. Throughout our evolutionary history, conserving energy when food resources were scarce was crucial for survival. Thus, our brains have evolved to favour behaviours that require less effort.

Seeking the easiest route to achieve a goal is also seen as a way to maximize efficiency, and it’s a tendency that modern life reinforces this. From fast food and escalators to software that automates tasks, easy options are readily available, and they play on our natural inclination to choose the path of least resistance.

But, in many areas of life, shortcuts rarely work, and investing is definitely one of them.


Most of us have been on a health drive at some stage, and the universal experience is that they’re very hard to maintain. We start with the best intentions to exercise more or eat a healthier diet, but, within a few weeks, or even days, we struggle to keep it up. Bad habits creep in and, before long, we’re back where we started — lounging on the sofa for hours on end and eating all the wrong things.

If it’s any consolation, the pattern just described is perfectly natural. It’s how the human brain has evolved. Our ancestors would have to go for long periods without food, so it was perfectly sensible for them to conserve energy if they didn’t need to expend it and to fill up on our calories whenever the opportunity arose.

In his bestselling book Thinking, Fast and Slow, the Nobel Prize-winning psychologist Daniel Kahneman, who died recently at the age of 90, described what he called a “general law of least effort”, which applies to both cognitive and physical exertion. “The law asserts that if there are several ways of achieving the same goal,” Kahneman wrote, “people will eventually gravitate to the least demanding course of action.” In short, human beings are wired to be lazy and to seek shortcuts.

Investing, like diet and exercise, is a classic example of an activity in which this propensity to laziness and preference for quick fixes can have a detrimental effect on outcomes.




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Investors are far more likely to achieve their goals if they use a financial adviser. But really good advisers with an evidence-based investment philosophy are sadly in the minority.

If you would like us to put you in touch with one in your area, just click here and send us your email address, and we’ll see if we can help.



© The Evidence-Based Investor MMXXIV



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