Netflix recently unleashed a bombshell documentary called, The Social Dilemma. It features a series of interviews with the early developers of the big tech names—Google, Facebook, Apple. They admit to designing our beloved smartphones and social media to hook us with meth-like addiction.
No surprise there. We already know we can barely take our eyes off our phone. But hearing these creators acknowledge they swayed users to unwittingly to buy stuff, vote certain ways, or take specific stances shook this writer to the core.
It seems, though, that these curators, while tricky, are not nefarious. Your attention defines their business model. It’s designed to get you engaged as much as possible to drive the price tag up to advertisers. And advertising moves capital. Some say that’s what makes these addictions a necessary evil.
So, economically speaking, all is well and fine. But, as The Social Dilemma points out, these “advertising tactics” tread a micro-thin ethical line.
Are we still willing participants in a free economy and political sphere, or are we merely manipulated into our purchases and stances? It’s a great discussion.
Because we investors are also struggling with addiction.
We, too, are influenced by dings in our pocket from stock news. We get dopamine hits during big market gains. And we drool when industry insiders tell us their secrets.
And all of that is by design.
In a way, it is like gambler’s high. Market timers are too familiar with it. They are aware of possible outcomes, but not which outcome. And just like the late-night table-sharks know, winning is euphoric. And it’s that rush that gets investors to sniff up historical data and market projections all night off the nightstand.
Let’s point out that these active investors aren’t stupid; they're just fiending for the next hit. But that can cause some stupid decisions. It causes investors to bet it all on Pets.com. Or Bitcoin. It causes them to accept sacrilegiously high fees from their advisors, praying they can score.
On the flip side, there are those savvier investors that dare to say, “no” to the peer pressure. You’ll no doubt find them soundly invested in property. Or in a diversified low cost, low-maintenance mix of index funds and bonds. You’ll likely find them relaxed in their armchair, in front of the TV, half sleeping, unbothered by the loaded chyrons and spit-style ramblings of the anchor behind them.
And that's a great way to be. Unmoved. Underwhelmed. Passive. We didn’t call them lazy portfolios for nothing.
So, what’s the simple secret to investing in 2021? Invest for the long haul. It will simmer your cortisol levels and pay out much better returns, in the end.
Just as importantly, turn off the notifications. Get your eyes off a screen and on a person. Move your mouth and have a conversation. Go crazy and make a little eye contact. Take a break from your phone and curb the habit a bit.
In conclusion, please do not assume I am on a high horse talking down to the common folk. None of us are above this media addiction. And that’s ok. As long as we understand that, we can make decisions *ding* ...I'm sorry, I've got to take this.