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When Was the Last Time you Changed your Mind?

"If I were tasked with building the ultimate human investor, being able to change one's mind would be the number one skill on the list." - Pure Portfolios, The Identity Leak

I was scrolling through my Twitter feed as I waited to record a podcast. I marveled aloud how entrenched people seem to be in their viewpoints.

My podcast co-host, Erin Varghese, perked up and asked...

When was the last time you changed your mind?

Great question.

I didn't have an immediate answer.

Upon reflection, I came up with a few things I've changed my mind on and beliefs I've held firm on.

Where I've Changed my Mind

I used to think valuations offered key insight into what the market does next.

While valuations are thought-provoking, they offer zero insight as a timing tool. The market has been technically overvalued since 2013.

See "Do PE Ratios Matter?"

I used to read Armageddon market scenarios with great interest.

I realize humans have an infatuation with pessimism. Most of these doomsday types repeat the same warnings year after year, and history isn't ripe with success stories from those betting against U.S. equity markets.

I used to watch mainstream news outlets and financial media.

I rarely watch any cable news or financial media channel.

No explanation needed.

I used to be on social media.

This one is a bit tricky. I don't look at my personal Facebook page. I deleted all of my social media applications on my cell phone.

I do use Twitter, LinkedIn, and Facebook to post Pure Portfolios content. I still believe Twitter is a great tool for investors, entrepreneurs, and business owners if you can follow the right people.

I don't engage in polarizing topics online or in-person.

I'll passively listen. I won't offer my opinion. If pressed, my default is "you're probably right."

I'm reminded of a saying, "never argue with a fool, onlookers may not be able to tell the difference."

I used to read everything related to financial markets.

I quickly found reading every piece of information is impossible. I needed a way to filter out the signal from the noise. I developed an information filter to sift through the nonsense.

I used to think Bitcoin and digital assets were a fad.

It's hard to ignore the digital asset wave. As of this writing, the SEC has approved the first Bitcoin futures ETF (BITO). Here are my thoughts on Bitcoin and its role in a traditional portfolio.

I used to think saying "I don't know" was a sign of weakness.

Now I think it's a sign of maturity and strength. It's perfectly fine not to have an opinion on something (especially if you know nothing about the topic).

Marcus Aurelius once said, "You always have the option of having no opinion."

I'm Not There Yet...

Interest rates and bond yields will not go meaningfully higher.

I've long held the belief that interest rates will be lower for longer than most expect.

In March 2017, I wrote "How long have we been hearing about interest rates & bond yields moving higher? It’s been an annual forecast for market experts and the financial media; it’s also been the most incorrect forecast during the past decade."

Bonds still have value in the context of a diversified portfolio.

In a silo, you might wonder why anyone would own a bond given paltry yields. Within a portfolio framework, bonds still provide a risk reduction benefits during periods of market stress. Think of bonds less as an income producer, more as a hedge against equity risk.

See "Are Low Yields a Good Reason to Shun Bonds?"

Inflation is here, but is likely temporary (in my opinion). I admit there could be some bias in there. My entire adult life inflation has been relatively benign.

See "What the Treasury Market is Saying about Inflation" and "Is Inflation Coming?"

This is a good exercise to run through every now and again to uncover blind spots, biases, and irrational thinking. We all have unique personal experiences that shape our view of the world. In my opinion, if you're growing, curious, and asking questions, it's likely you'll change your mind.

When was the last time you changed your mind?

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