Since we moved back to the west side of Denver (Lakewood, officially) I have been doing a lot more mountain biking. I can ride some nice local singletrack from my front door and try to do so on a regular basis. I am a mediocre mountain biker, but it’s fun, good exercise and gets me outside.
Here’s the thing about mountain biking. Being successful (i.e., not landing in a crumpled pile 20 feet from your bike on the side of the trail) requires doing the opposite of your intuition.
Last week I semi-conquered descending my first real set of “stairs” on a local trail (Zorro/Dakota Ridge if you’re a local). Aside from keeping your weight back, staying balanced and staying off of your front brake, there’s one other key to making it. You have to go. And go fast. You have to do the opposite of what your brain is telling you. If you take stairs too slowly, you’ll land with too much weight on your front wheel and pitch right over the bars. So you ignore that part of your brain that is screaming “SLOW DOWN” and hit the stairs at speed so you’re better balanced when you hit the ground.
As usual this has me thinking about successful investing. Successful investing requires us to shut down the voices in our heads screaming “GET OUT!” when markets are dropping off of a cliff and “BUY MORE!” when we’re racking up 20% returns and everybody at the neighborhood barbecue is chatting up their best stocks.
We’re human, and we can’t always ignore those voices. We need tools to help us make rational decisions when our irrational brains try to take over. This is why all sound investing starts with a financial plan and a well crafted Investment Policy Statement. These are the tools necessary to prevent emotional mistakes and create long-term success.