Jun 23 2023 30 mins
Follow John Jennings on Twitter at: @bigdogtwo and on Linkedin at: https://www.linkedin.com/in/johnmjennings/
and at his website: https://shorturl.at/fHMZ8
In this episode of The Really Simple Investing Podcast, host Floyd Saunders interviews John Jennings, the president of a $15 billion wealth management firm in St. Louis and an adjunct professor at Washington University's Owen Business School. John holds both a finance and a law degree from the University of Missouri.
Overview
John discusses his book, The Uncertainty Solution, which turns the ideas of investing upside down and challenges the traditional notion of needing certainty in investing. He explains why humans have a quest for certainty and how it relates to investing. The conversation also covers the average retail investor's behavior during a rising market and a market correction, and the alternative approach to investing.
Are you tired of trying to predict the future of the stock market? John Jennings, author of "The Uncertainty Solution," discusses the human need for certainty in investing and the mental models that can help investors focus on what they can control.
Jennings challenges the traditional idea that the stock market is the economy and emphasizes the importance of good investment behavior, such as disciplined rebalancing and index investing.
Jennings uses mental models to create a latticework of wisdom that will help you evaluate investment advice and learn better behavior in the face of uncertainty. To name a few: ignore expert predictions, be wary of stories, and try to invest like a dead person.
Jennings also discussed the importance of having a disciplined approach to rebalancing investments, especially during times of market volatility. He emphasized the benefits of index investing and passive investing, citing Warren Buffett's famous quote that the average retail investor should invest in the S&P 500 index fund.
If you're a starting investor, Jennings recommends focusing on good investment behavior, such as choosing inactivity as the default and rebalancing the portfolio once a year. Investing may be uncertain, but with the right mental models and strategies, you can build a solid financial foundation for your future.
Tune in to learn how to take a more disciplined approach to investing and avoid the pitfalls of trying to predict the future.
You can reach John at John at [email protected].
Chapter Summary
· Introduction of John Jennings (0:00:05)
· Overview of The Uncertainty Solution (0:01:29)
· Humans' quest for certainty (0:02:50)
· Short-term thinking and market gyrations (0:04:02)
· The need for cognitive closure (0:05:14)
· Seizing and freezing behavior (0:06:01)
· Example of cognitive closure during COVID-19 (0:07:21)
· Investing during market uncertainty (0:08:09)
· Stock market is not the economy (0:10:23)
· Investment experts' inability to predict the future (0:11:29)
· The stock market foreshadows what's going to happen in the economy (0:11:59)
· The solution is to accept uncertainty and focus on what can be controlled (0:13:20)
· Beware of experts and predictions (0:13:58)
· Mental models for better investing decisions (0:15:18)
· Choose inactivity over activity (0:18:06)
· The negative impact of overconfidence on investment
Learn how to make investing simple for anyone and get on a path toward wealth.