Life is a series of negotiations. A gamble, in a sense. It's a never-ending sequence of persuasive exercises, constantly trying to get someone to concede. And while that concession may get you hired, you're taking a chance that industry, that company, that market, will be around throughout your career to sustain your retirement. That's the gamble.

Investing is a continuous negotiation. Each trade has you searching for a willing counterpart who will accept your desired price. As before, you are taking a chance – a risk – with each transaction. But you're not gambling.

As a fiduciary, you'll find yourself having to manage life's risks, and it remains a challenge to insure you're not gambling (see “A Fiduciary Approach to Alternative Investments: Friend or Fad?” FiduciaryNews.com, June 18, 2019).

If last week's column could be said to have addressed fear, this week's addresses greed. Greed isn't necessarily premeditated maleficence. It can just as easily be the result of inertia. The kind of inertia that feeds on itself and impels you further.

Think of it as a hot streak. Each success emboldens you to take another swing. It gives you confidence, perhaps a far greater confidence than circumstances merit. After all, the odds will eventually catch up to us. Everyone – and everything – eventually regresses back to the mean. There's no escaping this.

The trouble is, those “one-in-a-million” shots get all the headlines. They get us thinking, “I could do that, too.”

How silly is this? Imagine reading a headline about something getting struck by lightning. No one immediately thinks, “I could get struck, too.”

If we think of our retirement savings and the investment portfolio it creates as merely a game, then we're more prone to fall into the trap of inertial greed. And, as they say, “greed kills.”

How do you best avoid this unfortunate outcome?

You can reduce the likelihood of sticking around too long by setting precise goals and by knowing exactly what needs to be done to accomplish those goals.

Once you've attained enough to meet those goals, take a step back. This may entail leaving some money on the table, and this is where the winners distinguish themselves from the losers.

Winners possess the discipline to collect their money and move on. Losers want to keep rolling the dice. They want to squeeze every last once of available loot from the table. The law of averages says they'll eventually come up snake eyes and lose everything. Just of the want of a few dollars more.

Thus is the lament of those chasing index returns. An index represents the market. It's impossible to tame the market. It acts like a wild beast. It's a bucking bronco that will ultimately throw any rider that stays on too long. There's no way around it.

Unless you get off. No one lives for an epitaph that reads “Here Lies John Doe. He Beat the S&P 500.”

Life is much more than simply a one-dimensional scorecard based on any arbitrary benchmark. The goal is bigger than the game. It's the job of a fiduciary to make sure they keep people's eyes focused on the goal, not a game.

And sometimes meeting the goal means it's OK to leave money on the table.

So leave it there.

READ MORE:

A 3-word fiduciary rule — Carosa

The 'Fiduciary Rule' versus the 'Rule of Fiduciary' — Carosa

Do you have the 'knows' to be a fiduciary? — Carosa

Instant Insights /

Leave money on the table… or else – Carosa

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