How to please the future you by taking investing actions today

Abraham Smith

Tom Bradley: These things are more important than being a brilliant stock picker or market timer, and a lot easier

Traders work during the opening bell of the New York Stock Exchange on Wall Street in New York City.
Traders work during the opening bell of the New York Stock Exchange on Wall Street in New York City. Photo by ANGELA WEISS/AFP via Files from Getty Images

I want to take you into the realm of science fiction. You hop in a time machine and beam yourself forward three years to a rainy August 2025 afternoon. You’ve spread out your bank statements on the kitchen table and are reviewing your investments (time travel isn’t always exciting).

Now the question: What would you have to have done in the past three years to please you in the future? This is sci-fi, so I’ll get inside your head to see what makes you smile.

Roadmap: The bad markets in the first half of 2022 got me looking at what I’m doing. It forced me to clarify what the money was for and when I would need it. From there, my advisor helped me determine an asset mix for my portfolio that suited my goals, time frame, and risk tolerance. It included all of my accounts: Guaranteed Investment Certificates, Registered Retirement Saving Plan (RRSP), Tax-Exempt Savings Account (TFSA), and Trading Account. I can’t believe I’ve waited so long for this frame to make decisions about my money.

More reason, less reaction: I stopped what my golf buddy was telling me. He had recommended Cannabis, Ether, and Peloton Interactive Inc., all at the peak of their popularity. I finally realized that his portfolio wasn’t doing so well. It seems to have healed my fear of missing out.

Regular Contributions: Rather than managing from golf game to golf game, I set up a pre-authorized monthly contribution. It’s automatic so I don’t obsess over every purchase. It was brilliant and now that I think about it, I don’t even notice money being taken out of my bank account.

funny money: I still have a small trading account. My “Moonshot” fund, as I call it, counts towards my overall equity allocation. I was fine for a while, but gave back most of my gains when the market crashed. It was cheap and fun education.

Less, but better: It’s true what they say about looking too much at your investments. We react twice as strongly to bad news as we do to good news. Given that there are almost as many lost days as there are promotions, I tested myself even though I was fine. I mostly own money, so I’ve tried to limit myself to checking my main account once a month. Well, I don’t even do that. I only spend a few minutes every quarter checking my bank statement.

Don’t blink: It got pretty ugly in there for a while. My portfolio was down sharply and everyone was talking about a recession. But I didn’t need the money (probably not until 2040), so I kept telling myself that lower prices meant buying more shares with my contributions.

Against the grain: I finally did what I promised myself. I’d read about buying when stocks are down and everyone’s scared for years, but I’ve never been able to do it. I used my bonus in 2022 to expand my portfolio when the markets were looking bad. I actually did it twice. The first purchase was about two months and 10 percent early. The second was at the bottom. Both went well.

Remaining Issues: For years I hesitated to deal with some nagging issues. I underpaid myself (ie saved) and overpaid my consultant (for one call per year at RRSP time). And I was over-invested in my old favorites: gold, real estate mutual funds, cannabis, and the Ark Innovation Fund. Having a plan forced me to confront them.

In progress: I promised my advisor that I would read a Warren Buffett book, but I haven’t finished reading it yet. I have to say, however, that the first 200 pages have already changed the way I think about investing. Wow.

Hopefully in three years your review will be as positive. When this is the case, self-congratulations should relate to process and routine, not short-term results. That’s because it’s challenging to be a disciplined investor. The task takes longer than anything you will ever do. There are many distractions that can throw you off course, and of course the outcome is always uncertain.

A disciplined process will help you deal with the short-term noise (and friendly tips) and focus on the things you can control: how much you’re saving; your long-term asset mix; and what you pay to invest. These things are more important than being a brilliant stock picker or market timer, and a lot easier.

Tom Bradley is Chairman and Co-Founder of Steadyhand Investment Funds, a firm providing low fee mutual funds and clear advice to individual investors. He can be reached at [email protected].

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