Roadmap
Lamplighter likes to highlight the good work of our team who work behind the scenes. The firm’s communications intern, Allison Yuan, contributed this post.
You’re driving on the highway. Rick Astly’s Never Gonna Give You Up starts playing. You think “I have to change this.” You start messing with your phone. The road curves. You do not. You wind up in a ditch.
You’re stuck in traffic, late for a meeting. You grab your phone and swipe to navigation, desperate to find a shortcut. While you’re looking down, traffic stops. Your car winds up in the trunk of the car in front of you.
Everyone, EVERYONE, knows distracted driving is dangerous. To drive safely, you need to pay attention to the road — where its going and what’s happening around. Car accidents happen because attention wanders.
Is it the same in investing? What will happen if your attention drifts to your financial app and all its bells and whistles? What happens if your financial app is deliberately designed like a game?
Intentional Diversion
Financial transactions of any size occur at the tap of a screen. Staying informed about your account status has never been easier. Someone, somewhere on the internet has made a case supporting whatever decision you’re about to make, whether it is a good one or not. New investment products with catchy packaging relentlessly try to catch your eye. Pity the modern investor, buried under a mountain of noise. But are any of these things important to your long term strategy? Probably not.
In the go-go lane of investing entertainment, your attention is what all those financial channels, Tik Toks, whizzy investing apps and others are selling. The business is to catch eyeballs—not necessarily make you returns. You are, after all, a “user.”
Slips in attention—away from the long-term and towards all this other stuff—can pile up. Mistakes can be minor—financial fender benders—a payment to the wrong person—or major—borrowing to buy call options on risky legal situations. The consequences of financial distraction extend beyond mere oversight, punching a hole in your budget and sinking your long-term financial plan.
No one’s driving strategy is “I’ll get into an accident.” In investing too, picking the right strategy is less difficult than putting in place the right guardrails. It’s about building habits that get you to your destination—both for safe driving and effective investing. It’s especially hard fending off expertly engineered investing products designed to get you to engage rather than behave. This is a big part of the investing problem Lamplighter aims to solve—building and fostering long-term habits—focusing on how each part of the portfolio fits into the bigger picture and how that bigger picture works for its investors.
Disclaimer: None of this is investment advice. It's meant to illustrate ways LCM thinks about investing. Things that LCM decides are good investments for LCM and its clients are based on many criteria, not all of which are covered here. Some or all of LCM's ideas may not be suitable for other investors. LCM does not recommend investing either long or short any position mentioned. LCM may own positions in some of the companies mentioned. Some of its ideas will lose money — investing entails risk. See full disclaimer here.
