The Bird’s Eye View:
We all deal with unknowns in our lives, but beware of the unknown unknowns. Those will get you, according to former Secretary of Defense Donald Rumsfeld.
On this episode of Your Retirement Elevated podcast with Scott Dougan, we’re not discussing dollars and cents. We’re talking about the unknown in life.
Former Secretary of Defense Donald Rumsfeld had an operating hypothesis that he was always going to be dealing with unknowns. He said the unknown breaks down into two categories – known unknowns and unknown unknowns. It isn’t the known unknowns that get you.
If we look back, one example of a known unknown would be Y2K. As the millennium approached, a problem in the coding of the world’s computer systems threatened to render them inoperable at midnight on Dec. 31, 1999. On the other side, Sept. 11 was an unknown unknown.
In 2020, investors have been faced with both a known unknown – the presidential election – and an unknown unknown – the Covid-19 pandemic.
So many people wanted to get out of the markets before the election, fearing the success of one candidate over another would plunge our nation into chaos. But that’s not rational thinking, it’s emotional.
“The markets have weathered the storm [in 2020]. It’s been choppy. It’s been uncomfortable. But they’ve continued to perform,” said Scott.
It’s best to stay the course and be goal-focused, planning-driven investors.
“When we get emotional and let our decision-making process get clouded, that’s where we can get hurt,” said Scott.
Listen to the full episode. Use the timestamps below to find specific segments.
[2:16] – Known unknowns
[4:37] – Unknown unknowns
[9:09] – The election and pandemic
[12:49] – Stay the course
[15:55] – Being emotional about your savings
Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.
Scott Dougan, RFC, Investment Advisor – Contact