Comedian George Carlin joked,
“Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?”
What’s your driving style?
The Bullet floors it in the left lane, weaving through traffic like Richard Petty, convinced speed limits are merely suggestions.
The Oblivious Cruiser plants themselves in the middle lane at precisely 47 mph, blissfully unaware of the mile-long parade of frustrated drivers behind them.
The Wildcard alternates between tailgating, sudden braking, and last-second exits, as if being chased by an invisible swarm of bees.
Or are you the Zen Master? You set your cruise control at a steady speed, never changing lanes, never getting rattled, and always arriving right on time.
Not all drivers are equal, but I’d maintain that the spectrum of “good” drivers shares some common qualities. One of those is the combination of: 1) getting to your destination in a reasonable amount of time, while 2) not exposing yourself to undue risk. A good driver gets there fast enough to keep life moving, but not so fast that your life flashes before your eyes.
Over the past few weeks, I’ve had many terrific portfolio conversations, and I can’t help but see the Investing corollaries to this truth about drivers.
For any person – or any of you reading this – there’s not just one answer to your investing life. Instead, a spectrum of “good” portfolios can accomplish your goals. There’s a messy, grayish range between, for example, a 60/40 portfolio vs. 55/45 vs. 65/35. One is perhaps a little faster, slower, bumpier, or smoother. But, ostensibly, they are similar shades of the same speed.
It’s like the difference between setting the cruise control at 62, 65, or 68. You can be a “good” or “safe” driver at either speed. Sure, eventually, you introduce enough speed to get a ticket. Or you dial down the speed to the point where you’re an impediment to traffic… and to getting home for dinner on time. But so many of our driving styles are “good enough.”
Eventually, we have to call out differences. Going 30 vs. going 90 are not in the same “grayish range” anymore. They are black and white. A 100% stock portfolio is just as black as a 40/60 portfolio is white.
So, where’s your gas pedal? What kind of driver are you?
Are you speeding through your investments, hoping to catch the next big thing? Or taking the slow-and-steady route, keeping things safe but slightly too cautious?
The goal isn’t to mimic someone else’s approach. It’s to find the right balance for your life, one that keeps you on track and helps you reach your destination safely. When it comes to your portfolio, just like behind the wheel, it’s all about maintaining control, understanding the risks, and adjusting the speed to fit your needs.
Like all us good drivers (right guys?!), the best investors find their personal tempo and cruise toward their goals – no speeding tickets, no wrecks, just a smooth ride to the finish line.
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-Jesse
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