August 26, 2016
“You Don’t Know What You Don’t Know”
“You don’t know what you don’t know”
This famous quote, which is attributed to Socrates and Bob Woodward, amongst others, is one of the foundations of my life. I am reading a book called The Invisible Gorilla by Christopher Chabris and Daniel Simons. The book focuses on attention, perception, memory, and reasoning – which leads us to this startling conclusion: “Our minds don’t work the way we think they do.” Chabris and Simons once did an experiment that showed 50% of us, at any given time, will miss critical information, even when it is right in front of us.
That main concept is that we often see what we expect to and create connections that lead to erroneous perceptions. What does this have to do with financial planning? Well, everything.
Everyone has a finance “guy,” and when faced with the question, “Why is he your guy?” the answers are often interesting. I’ve known him a long time, we went to college together, we go to the same church… Are these really the criteria that we should use to choose a trusted advisor? Shouldn’t you be asking if “your guy” really focuses on your needs? Is he (or she) doing the best that can be done?
The way out of this situation is actually quite simple. First, make sure your data is correct, well organized, and connected to each other in the best way to produce useful information. Then, when comparing multiple “guys” make sure you are comparing the same data in the same way at the same time – so you are truly comparing apples to apples. We at Gainplan would be happy to assist you in any way we can.
This commentary on this website reflects the personal opinions, viewpoints and analyses of the Gainplan LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Gainplan LLC or performance returns of any Gainplan LLC Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Gainplan LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
Gainplan LLC provides links for your convenience to websites produced by other providers or industry related material. Accessing websites through links directs you away from our website. Gainplan LLC is not responsible for errors or omissions in the material on third party websites, and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites.