Investors: The focus should be on the future

As originally appeared in The Jerusalem Post on November 22, 2024.

“When the past no longer illuminates the future, the spirit walks in darkness.” -Alexis de Tocqueville

Earlier this week I went to get a haircut. My barber, (he’d prefer to be called a hairdresser but I’m not a hairdresser kind of guy), was talking with me as usual. After years of cutting my hair, he finally asked me what I do for a living. I told him and he said “Oh, the stock market. That’s dangerous. I once invested in a stock and lost almost all of my money. I’m never investing in the market again.” It’s a story I have heard many times, and it’s a story that can potentially cost people huge amounts of money over the long-run. I learned long ago that to try and convince individuals with this attitude that there are different ways to invest is mostly a waste of time, so I changed the topic to food as he was complaining that he was starving!

Thursday was the 4th anniversary of Rabbi Jonathan Sacks’ passing. On this weeks Torah portion of Chaye Sara, he has a piece “A call from the future” that I highly recommend reading, about Abraham and how he dealt with the passing of his beloved wife, Sara. He mentions how it would have been understandable for Abraham to have lived out the rest of his days in grief over her passing. But in fact, that’s not what happened. Rabbi Sacks comments, “What does a man of 137 do – the Torah calls him “old and advanced in years” (Gen. 24:1) – after such a trauma and such a bereavement? We would not be surprised to find that he spent the rest of his days in sadness and memory. He had done what God had asked of him. Yet he could hardly say that God’s promises had been fulfilled. Seven times he had been promised the land of Canaan, yet when Sarah died he owned not one square inch of it, not even a place in which to bury his wife. God had promised him many children, a great nation, many nations, as many as the grains of sand in the seashore and the stars in the sky. Yet he had only one son of the covenant, Isaac, whom he had almost lost, and who was still unmarried at the age of thirty-seven. Abraham had every reason to sit and grieve.

Yet he did not. In one of the most extraordinary sequences of words in the Torah, his grief is described in a mere five Hebrew words: in English, “Abraham came to mourn for Sarah and to weep for her.” (Gen. 23:2) Then immediately we read, “And Abraham rose from his grief.” From then on, he engaged in a flurry of activity with two aims in mind: first to buy a plot of land in which to bury Sarah, second to find a wife for his son. Note that these correspond precisely to the two Divine blessings: of land and descendants. Abraham did not wait for God to act. He understood one of the profoundest truths of Judaism: that God is waiting for us to act.”

Rabbi Sacks goes to speak about what he learned from Holocaust survivors. “Eventually I discovered. Most of them did not talk about the past, even to their marriage partners, even to their children. Instead, they set about creating a new life in a new land. They learned its language and customs. They found work. They built careers. They married and had children. Having lost their own families, the survivors became an extended family to one another. They looked forward, not back. First, they built a future. Only then – sometimes forty or fifty years later – did they speak about the past. That was when they told their story, first to their families, then to the world. First you have to build a future. Only then can you mourn the past.”

There is much more brilliance in the piece, but I need to connect this to my barber and a certain approach many investors have. I may sound like a broken record but those who really keep their eye focused on the long-term, end up doing well financially. Sit down and define your goals and needs, and then invest with an allocation that will help you achieve those goals. Don’t get caught up in trying to time the stock market, instead buy good quality assets and hold them. Don’t panic when markets drop and sell in order to “wait for it to start going back up’ before buying back in. I know people who are still sitting in cash after the financial crisis in 2008-9, waiting to “buy back in” while in the interim markets have exploded higher.

Most studies show that market timers and individual stock investors tend to woefully underperform the broader market over the long-term. What you should do is forget about short-term market gyrations and focus more on re-assessing your goals and needs from time to time. Invest in quality assets for the long-term. That’s the way to build a successful financial future.

The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.

Aaron Katsman is the author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.