99 | Life Below the Personal Record
At some point in any athletic pursuit, we experience some level of peak performance - the first lifetime peak is usually a season where physical ability covers over most other shortcomings.
It’s different for everyone, but often the first peak coincides with a season of life characterized by youth, unrealistically high frequency of reps, and fewer competing priorities.
Over time, the memory of the peak tends to lead us one of two directions - it can inspire and remind or it can discourage and haunt.
When we are haunted, inevitably we push ourselves to injury, grumble about the good old days, or throw in the towel because it’s no fun to play if we can’t compete with a younger self.
A lifetime of investing isn’t that different from that of an athlete.
The S&P 500 reaches a new all-time high on ~5% of its trading days. All-time highs are exhilarating, confidence-instilling, and full of dopamine - much like a new personal record.
But this also means that ~95% of its trading days, the S&P 500 is the veteran athlete wishing that it could be more like it’s younger self.
That’s a lot of days longing to beat or even match a personal record.
On the investment side of things, the haunting looks like grumbling about recent performance, reaching for extra return in a reckless manner, or deciding that you might as well stop investing before it all goes to $0.
Life below the personal record can drive us crazy not because it’s that bad, but because it’s relatively worse than where we once were.
The trick is not using brute force or discovering a fountain of youth that can take us back to a previous time.
It’s more of a mental game than that.
Some blend of recognizing that you can’t set new personal records in perpetuity, so when the times are good you can actually recognize that they are in fact the good times. Thank you, Andy Bernard.
And an understanding that the only thing that allows you to set a new personal record is your mindset while you’re living below the last one.
Additional Resources
Compounding in the Stock Market is Messy by Ben Carlson
Same Return. Different Emotions. by Money Visuals