Aim For Financial Meaningingfulness, Not Happiness

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Posted: Oct 26, 2018 10:23 AM
Aim For Financial Meaningingfulness, Not Happiness

“It’s in responsibility that most people find the meaning that sustains them through life. It’s not in happiness. It’s not in impulsive pleasure.”

— Dr. Jordan B. Peterson

Responsibility is a heavy burden.

But for those who assume the responsibility that comes with life and overcoming its inevitable hardships, the mere admission of said responsibility can actually be a reward in itself. That’s one of the themes that runs through the work of clinical psychologist and best-selling author Dr. Jordan B. Peterson. The way Peterson sees it, if you think the meaning of life is achieving happiness, what happens when you’re unhappy?

“Happiness is a great side effect. When it comes, accept it gratefully. But it’s fleeting and unpredictable. It’s not something to aim at – because it’s not an aim,” writes Peterson. The doctor goes on to add, “If happiness is the purpose of life, what happens when you’re unhappy? Then you’re a failure. And perhaps a suicidal failure. Happiness is like cotton candy. It’s just not going to do the job.”

Instead of pursuing happiness, Peterson suggests pursuing that which is truly meaningful, and it is through this pursuit that you’ll be faced with the responsibility of acting in a manner that makes life meaningful.

Now, I’ve been contemplating these ideas of late, having recently read Peterson’s best-seller, “12 Rules for Life: An Antidote to Chaos.” And, because of my responsibility as the editor of this publication along with my other newsletter advisory services, I tend to see things through market-colored glasses. Through those lenses, I also see this market as a way to aim for meaning over happiness. Let me explain.

The equivalent of pursuing happiness in markets is to make the big score with a big trade, and to ride the hot momentum stocks all the way up. And, when things are going well in a bull market, those big wins tend to bring a lot of happiness.

Yet what happens when things don’t go well? What happens when your momentum trade crumbles and falls below your stop loss? Well, that tends to be the opposite of happiness. In fact, it tends to be the definition of actual pain and loss.

And, based on the market action over the past several weeks, now is a time when a lot of unhappiness is wafting on Wall Street.

Now, I’m not saying that there isn’t a place for momentum investing or quick-hit trading. In fact, I think it can play a big, positive role in your overall returns. This is especially true if you’re the type who likes to put money to work in pursuit of short- and medium-term alpha.

Yet, what’s always important to remember is that what’s really meaningful when it comes to investing is to build wealth the responsible way. To that end, you must do so with a strategy that’s focused on the long term, and one that allows you to better deal with the inevitable ebbs and flows of market volatility.

And just to remind you of that volatility in markets of late, take a look at the six-month chart of the S&P 500 Index.

As you can see, in mid-October we fell below key support at the 50-day and the 200-day moving averages. Since then, we’ve bounced back above the 200-day moving average several times. Yet the latest decline in stocks over the past couple of sessions has pushed the broad measure of domestic equities well below the long-term moving average.

So, what do you do now if your goal is to pursue meaning (i.e. long-term wealth building)?

Well, that answer depends on the type of investor you are. If you are a long-term investor who has built a portfolio of stalwart dividend stocks over the years, then the recent pullback shouldn’t bother you very much.

If you’re an investor who follows the trends, then you should have had a plan in place that moved much of your allocation to the safety of cash as soon as stocks initially fell below that key 200-day average.

Readers of my Intelligence Report advisory service have been building positions in stalwart, dividend-paying stocks for years, so this little hiccup is no more than a bump in the road on their pursuit of investing meaning.

Meanwhile, readers of my Successful Investing advisory service have been a bit more proactive of late, using that key technical break of the 200-day moving average to lighten up on equity positions and ride the volatility out in the safety of a high cash position.

Both of these approaches are based on pursuing meaning with your money, and both are designed to preserve and grow capital. And though each approach comes at the goal from different angles, the bottom line of pursuing long-term financial meaning is the same.

As the Buddhist adage goes, “there are many paths to enlightenment,” and so too are there many paths to financial meaningfulness.

But first, one must aim for meaning over happiness.