Have you ever thought of investing but find yourself saying “ahh, another day”?
Or have you had opportunities but failed to take action?
These are all because of INDECISION.
When it comes to investments, indecision carries a cost. Many would emphasis on the quantifiable, such as: money losing its value to inflation and opportunity cost for not investing.
For example, you may have seen messages like : "If you had invested in S&P500 20 years ago, you would have made X% return" or a chart that tells you investing is better than savings
source : hatchinvest.nz
These are pretty factual. We can't argue against number. On hindsight, if we had invested 10-20 years ago, we are probably better off today.
However, i find it myopic to just focus on the "money aspect". We miss out on things that matter more, things that cannot be quantified.
Missing out on learning
When we avoid making decisions, chances are we have also avoided gaining the knowledge and skillsets needed to make that decision.
What's worse, we can never know if it's a good or bad one because nothing has been done. Looking back, if it was a terrible investment we may say "thank goodness I didn't invest". But truth is, we'll never know. We may learn something priceless in that process too.
All the knowledge, skills and experience we could have gained would have developed our financial confidence and refined our thinking. These play an important role in bigger decisions that has yet to come.
Missing out on crisis
A good investor tends to be self-aware and great at managing their own emotions.
How will we know our emotional reaction to market events if we are not vested? When the stock market plunge, will we fight, flight or freeze?
Logically, we know that market crashes are great time to invest but will we have the emotional muscle to pull the trigger? How will we react when our portfolio drops?
Importantly, how many major crisis do you think we have in our lifetime? By procrastinating, we may very well miss out on another market experience which can teach us to be better at our emotions, thus a better investor.
Hesitation on future opportunities
I believe it takes trial and error for one to figure out what investment instrument suits them.
Some starts of with something low risk and move to high risk. Some starts and stays at low risk. Some go all in on Tesla.
Thing is, we'll never know when a good opportunity may land on the table. When it does, we better be sure of our comfort level.
To know how much we are willing to invest.
To know how much risk we are willing to stomach.
No risk profiling questionnaire can answer that for you. It takes time to figure out and for your comfort zone to expand.
If we're not mentally prepared when the opportunities come, we'd probably lose them.
Conclusion
Indecision comes at a cost. The quantifiable cost is just a fraction of what we stand to lose.
Do something rather nothing.
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Disclaimer: The content created are based on my personal opinions and may not be representative to everyone or any organisation. If you have any doubts or queries pertaining to insurance or investment, please seek professional advice from a trusted adviser in an official setting.
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