The Traders Journal

The Paralysis of Perfection: The Investor's Ongoing Challenge

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ImageThe brilliant novelist Isabel Allende once wrote, “Fear is inevitable, I have to accept that, but I cannot allow it to paralyze me.”  Similarly, far too many investors are reluctant to trade because they believe every puzzle piece of their complex methodology must be in place before they can act.  They are frozen into inaction by the misguided need to do it perfectly right or else not do it at all.   While this is commendable in many vocations, what they fail to acknowledge is that this is virtually unachievable in the investment arena.


 

A more reasonable approach is to commit to making the best choice you can at that moment, using the tools and methodology at hand, knowing you can go back and make changes or improvements.  This will move you in the right direction as an investor and towards what amounts to an acceptable personal definition of perfection that you can live with.  We traders must be content with eagerly seeking the promise of perfection while knowing in the back of our minds that like a greyhound at the racetrack, we’ll never actually catch the rabbit. 

I often write about the need for investors to be brutally honest and candid with themselves and about themselves.  If you are the type of person whose ultimate goal in life is to become the “perfect investor” and consequently you don’t dare trade the markets for fear of failure and the sting of defeat, then do yourself a favor and look elsewhere for a hobby and turn over your assets to a professional money manager.  In my seminars, I acknowledge this paralysis of perfection by offering a humorous list of 64 excuses that one can use for procrastinating and not yet investing in the stock market. 

On the other hand, if you are willing to live in the middle space between perfection and failure and be willing to embrace the gray area that is the stock market, you’ll do nicely.  Just remind yourself after each trade that you are a ‘recovering perfectionist’.

Trade well; trade with discipline!
-- Gatis Roze

Personal Note: I want to thank my readers for all the kind comments and encouragement. Your responses most definitely motivate me. For those of you who are not yet using the automatic delivery feature, please check it out. It makes it easy to receive fresh content every Friday by various delivery methods of your choice. Check out the options under the heading “Subscribe to this blog” on the right.

Gatis Roze
About the authors: , CMT, holds an MBA from the Stanford Graduate School of Business and is a past president of the Technical Securities Analysts Association (TSAA). He is also the co-author of Tensile Trading: The 10 Essential Stages of Stock Market Mastery (Wiley, 2016). A full-time investor for over 25 years, Gatis has taught sold-out investment courses throughout the Pacific Northwest and beyond since 2000. Learn More

Grayson Roze
is the author of Trading for Dummies (Wiley, 2017) and Tensile Trading: The 10 Essential Stages of Stock Market Mastery (Wiley, 2016). He has worked in the financial services industry for StockCharts.com since 2012, and now serves as the Business Manager for the company. He holds a Bachelor's degree from Swarthmore College. Learn More
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This post reminds me of the quote from Voltaire about "the perfect being the enemy of the good". As you rightly point out perfection is difficult or perhaps unattainable in the investment realm. Thank you for sharing your expertise with us in The Traders Journal.
In my opinion, it is good to strive for perfection, as long as one remembers that it is impossible to attain. I've tried to explain to my friends that are too scared to invest, that you aren't going to "win" every time, but you will never win if losing scares you out of playing in the first place.
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