The Stoic Investor was born out of my love for philosophy and an interest in investing. My interest in stoic philosophy was piqued with the reading of A Guide to the Good Life: The Ancient Art of Stoic Joy by William Irvine. Further study of stoicism seemed to reveal a potential application to the realm of investment activity especially as it concerns the emotional response to that activity.
In the various articles and books I’ve read, I’m continually surprised by the following theme: investors lose out on market return due to their own behavior. The field of behavior finance is a growing and intriguing area of study as we learn that a large number of investor are anything but rational when it comes to their investments. It is troubling yet hopeful that so many could earn higher returns by doing nothing more than getting out of their own way.
Here is where stoicism comes in. What if you could endure both exhilarating highs and stomach churning lows of market activity in stride? What if seeing a 20% rise or fall in your portfolio value had no impact on your emotional wellbeing? Over time what would having no emotional response to investment news have on the value of your portfolio? Perhaps this requires an emotional detachment not inherent to everyone’s emotional constitution. However, I believe that learning to limit your emotional response to investing can lead to rewards equally if not greater than those gained by learning to read financial statements, model a stock price or studying industry trends.
Here’s to you and your path to becoming more of a stoic investor in your own right.