How Doing Nothing Can Cut Through The Noise
If you always pursue the latest way, you rob yourself of the peace and tranquility that being patient and doing nothing provides.
Times are volatile. I dissect how to view our 401ks, retirement accounts, investments with 10, 20, 30-year time horizons and cut through the noise in these periods.
In the third grade, we completed multiplication tables every week. The teacher set a timer, and you tried completing the tables before the alarm blared. Now, I love math, and for me, anything was a competition, which led me to do well. Beyond the pride of finishing first, the teacher rewarded the first place finisher with organizing graded papers in the cubbies to take home. Often, I was placing those papers in the cubbies.
However, despite my performance, life in elementary school wasn’t always glamorous. I did well in school, but I was in and out of trouble. It wasn’t the trouble that landed you in the principal’s office. It was the trouble where the teacher scolded you in front of the class to make an example, you know? I was never a huge disturbance to others. My issue arose when I completed assignments. I got restless. I may start chatting with my friend when we are told to be quiet until everyone is finished. I was only a kid. My mind was active. I needed movement, which is why I loved the incentive of filing graded papers. At least that is how I saw it.
I always sweated when parent-teacher conferences arrived. My teacher explained to my parents that I hurried through my work to file the completed papers in the cubbies to see everyone’s grades. But I excelled in math and my grades didn’t suffer. If the reward for completion was avoiding sitting still, I was motivated. On the other hand, if the teacher felt that was an issue, why wasn’t the reward for finishing first changed? I didn’t care about people’s grades. I struggled to do nothing. Everyone does. Why do young kids get in trouble? They're curious and when their curiosity wanders long enough, they end up somewhere they shouldn’t be.
The restlessness doesn’t evaporate as we get older. It is forever hard to do nothing. Waiting for your name to be called in the doctor’s office? Whip out your phone and start scrolling. Major finance news networks say a recession is lurking? Sell off your stocks and sit with cash. Anything to not be doing nothing.
Humans are productivity machines. They want to operate at peak productivity all the time. Some of it is the finitude of life, but most of it is wanting to feel as if you are not a bystander to your own life. Impatience is an innate trait. Humans would love to transcend their limits and be able to move at a breakneck pace to achieve their desires. It is a need for control, but much of our life lies outside our control.
Impatience sprouts out of the uncontrollable. People grow impatient and honk in traffic, sell an investment early, or no longer read because they become restless. But you surrender to the reality that things take time, and sometimes, taking time means doing nothing.
Of course, society is a place of constant simulation. The rate of change is exponential. Markets are volatile. Trump’s presidency brings a flooding of news every day as he tries to set his influence in the first 100 days. It is hard to sit and watch things move around you, maybe the hardest with investments.
Financial pundits will tell you to liquidate your assets despite two weeks ago saying it was a generational buying opportunity. You are whipped around, thrown to the ground, and left feeling nauseous trying to keep up with the news and follow the “expert” opinions. Networks try to convince you that we are in precarious times. It is human to be entranced by these headlines, but sometimes, the best thing we can do is nothing. If you zoom out, the S&P 500 is up 1.46% on the year. A big nothing burger. If you held through the craziness, you’d be up on the year.
The skill, yes the skill, of being able to do nothing is valued. If you can sit in the discomfort of the feeling of always needing to act, you are far less likely to make poor choices with your time. If you sat through the COVID craziness and did nothing with your investments in the S&P 500 over the last five years, you returned 100%. From 1871-2012, every single 20-year period earned a positive real market return. In the moment, doing nothing is unappetizing. But doing nothing and letting your money sit, lends you to do quite well. A caveat applies if you are operating on a shorter timeline but for the investments that help us retire, i.e. our 401k made up of the S&P 500 and company stock, it is often best to do nothing.
Jennifer Roberts, an art history professor at Harvard University, teaches this lesson well. The first lesson of her class is to choose a painting or sculpture in a local museum and stare at it for three hours straight. That’s it. No phones. No social media. No books. Nothing. You and the art piece. It is quite insane. In a world full of external pressures to move fast, this allows students to slow down and spend the time needed on anything. Like compounding, creative work takes time.
It starts as a drag. The beginning of the three hours make you irritable, irate almost. Time passes like water dripping from a leaky faucet. A slow burn. But as Oliver Burkeman explains in his experience of doing it in Four Thousand Weeks,
“And then, around the eighty-minute mark… You finally give up attempting to escape the discomfort of time passing so slowly, and the discomfort abates… The second-order change has occurred: now that you’ve abandoned your futile efforts to dictate the speed at which the experience moves, the real experience can begin… Your reward for surrendering the fantasy of controlling the pace of reality is to achieve, at last, a real sense of purchase on that reality.”
This idea leaks into investing. The news suffocates us. It is a whipsaw relishing in the good news one day and screaming in horror from the bad news the next. A strong cultural pressure exists to always be doing something. Moving the money in our 401k, or retirement accounts, around to always be optimized at the present moment.
If you are operating on long timelines, 10, 20, or 30 years, but always pursue the latest way, you rob yourself of the peace and tranquility that being patient and doing nothing provides. It begins with the willingness to resist the constant movement and savor doing nothing. To enjoy the positive returns of a 20-year period, you allocate your money and let it work for you. You do nothing. It is ingrained in us, look at me in the third grade, to always be moving, but the kind of meaningful investments that allow us to retire, take time and work. Some of the hardest work done is doing nothing.
-Scantron
Always appreciate you reading.