Investors are easily motivated, in spite of all historic evidence to the contrary, to flee to safety when markets go down. That is, they sell their stocks or other assets and “go to cash” to wait out the storm. They are driven by fear that the market valuation (their invested net worth) will be irreversibly diminished. I often say to them that when fear hits an investor, the only thing that will enable them to get back in the market is comfort. For comfort to exist, they need evidence that it is safe (i.e. a rising stock market). Sadly, that comfort is typically restored when the market has not only gone up for a while, but it has surpassed the level in which they got out of it in the first place. In other words, they’ve committed the worst sin in the investment world: sold low, bought high. It’s hard to have faith that you can grow your nest egg when you do that a few times. Fear is a powerful emotion.
Hate is stronger.
Someone on my Facebook feed yesterday posted the article I’ve attached below written by Deepak Malhotra of Harvard. I hope you take a moment to look at it because it talks about hate, as a tool, and how intractable it is to reverse. Nearly every candidate for lofty offices (e.g. Governor, US House, Senate, and President) use fear as a tool. “If you vote for candidate X, your taxes will go up, jobs will be lost, and puppies will starve.” Eventually, as the election heads toward the finish line, candidates drop the act that their opponent’s ideas are bad, and instead give voters reasons to choose them. They turn the conversation to their own attributes, strengths, and qualities and essentially ignore their opponent. If your candidate doesn’t win and over time puppies don’t starve, jobs aren’t lost, and/or taxes didn’t go up, you have an opportunity to change your mind about someone. You may not like them ideologically (nor their political party), but at least you have the chance to see them as human. The fears were unfounded and we’ve moved on.
Donald Trump is sowing hate at the deepest, most base levels, in unprecedented ways in this election. He has moved away from “simple” fear tactics. Everything he talks about now is about making people that aren’t him “others” and therefore easier to hate. I think the Jewish population of the United States picked up on this earlier than most groups due to the relative proximity of the Holocaust. We’ve seen this before and it doesn’t end well. But it’s nearly inescapable to any moral person who chooses to see: Donald Trump is breeding a large contingent of people in our United States to hate thy neighbor. It’s extremely frightening. Forget about the idea that he’s a terrible man who has assaulted women for decades. His ideas, for a collective, are about destruction. They are all about hate. And the hate ship can not be easily turned over time.
“Fear and anger might make it difficult for us to work with each other, but hate strips away our willingness to even try.”– a clip from the attached article. Hate changes people. It goes to the marrow of who they are as a person. Some who experience hate are beyond recovery. Most aren’t. Here is the prescription, described in greater length in the attached.
(1) Don’t force them to defend their beliefs
(2) Provide information, and then give them time
(3) Don’t fight bias with bias
(4) Don’t force them to choose between your ideas and yours
(5) Help them save face
(6) Give them the cover they need
(7) Let them in
“Some of the above advice requires that we temper our natural inclinations for how to behave when someone is yelling and screaming or pushing and shoving. It is well worth building this discipline. Of course, not everyone is ready to change their mind. Equally, not all minds can (or need) to be changed. But you will have a much greater likelihood of navigating the path to change if you invest in building an exit ramp. The election of 2016 is as important a time as any to do it.”
Mr. Malhotra’s article is here: hbr.org/...