September 2021 Client Newsletter
Hello Again!
First Some Announcements:
Now is a great time to sit down and plan for the end of year. If you are ready to sit down (in person, on the phone, or on zoom) and have a few questions give us a call. We will discuss potential tax moves to make before the end of the year as well as answer in any questions you have. When you are ready, give us a call, and don’t forget your taxes!
Recent Blog Posts include: 6 Signs Your Elderly Parents May Need Help with Their Finances, How to Get Your Adult Children to Stop Relying on You Financially, and more. To read visit: AscendInvestment.com/GarrettsGarage
My First Hole In One
Golf is a game that I have always wanted to play. A perfect excuse to be outside in some nice cut grass is always appealing. With the COVID shutdown and after the crazy market I thought it was a good time to take up a new hobby. So, over this last year I started playing golf.
A few weeks ago, I hit my first hole in one.
When I first made contact with the ball my thought was “I didn’t hit that very well.” But with a very lucky few bounces, that looked more like mini golf than the PGA Tour, the ball rolled and rolled and dropped in the cup.
Looking just at the result, I hit the ball perfectly because it went in the hole. But taking a step back there was no way I could constantly recreate the swing, ball flight, and lucky bounces. Too many things had to happen together. So I should not be practicing hitting the ball poorly but I should practice in a way that can provide consistent results.
Resulting
Annie Duke, a professional poker player and cognitive psychology researcher, wrote an excellent book titled, “Thinking in Bets”. She shares “Chess contains no hidden information and very little luck. The pieces are all there for both players to see. If you lose at a game of chess, it must be because there were better moves that you didn’t make or didn’t see. The decisions we make in our lives […] involve uncertainty, risk, and occasional deception, prominent elements in poker. Trouble follows when we treat life decisions as if they were chess decisions.”
Life is full of luck, when and where we are born, who happens to be driving on the road at the same time we are, and random medical challenges. Duke continues, “When I consult with executives, I sometimes start with this exercise. I ask group members to come to our first meeting with a brief description of their best and worst decisions of the previous year. I have yet to come across someone who doesn’t identify their best and wort results rather than their best and worst decisions.”
Duke calls this “Resulting” when someone decides whether a decision is good or bad based on its outcome. That may be true in chess but not always in life.
Great Decisions
If you haven’t read this book, I highly recommend it. Duke shares how to make great decisions “What makes a decision great is not that it has a great outcome. A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. That state of knowledge, in turn, is some variation of ‘I’m not sure.’”
Going back to my hole in one, resulting would lead me to practice the same bad swing that led to the desired results. But this would take me down a path of frustration and inconstant results because so much randomly had to happen.
When making decisions in life, such as investments, retirement, spending, etc. there is a large section of luck. As a result, a decision needs to be based off a good process that will likely lead to desired results.
When things don’t go your way, ask yourself, is this result of a bad decision or bad luck.
Feel free to pass this message along to anyone who you think might find it useful!
Cheers,
Garrett G. Smith
Financial Advisor
Ascend Investment Partners
Paul M. Norman, CFP®
Senior Financial Advisor
Ascend Investment Partners
http://www.ascendinvestment.com/
Logan:
214 South Main Street
Logan, UT 84321
Tel: 801-476-1200
Fax: 801-476-1207
Ogden:
175 Historic 25th Street
Ogden, UT 84401
Tel: 801-476-1200
Fax: 801-476-1207
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