Benchmarks and the only return that matters
Like many of you, my phone pictures are backed up to the cloud. It happens automatically. It is a wonderful and helpful service. Yes, I am guilty of feeding the insatiable appetite of the technological surveillance machine for the sake of convenience, but we all pick our battles.
To assuage any misgivings I may have about so freely "uploading" my personal images, the service does neat things, like send me a notification every day reminding me of pictures taken on this very day in years past.
To my delight I am shown pictures of what my kids looked like 1, 2, 4 even 10 years ago. Setting aside the horror of realizing I have uploaded well over a decade of images, I revel in and embrace the nostalgia. It makes me smile to see where I was, and what we were doing, sometimes reinforcing, shaping or clarifying a memory, other times resurrecting it.
These photos serve as visual benchmarks. We are reminded how much can change over the years like our kids or our sense of fashion. We are also reminded how much has remained the same like my waist line despite all efforts.
Benchmarks can be important. When packing up to move, I found some personal goals I had written down more than 15 years ago. Those statements created something to work toward, something I could measure and monitor the progress. They were unique to us and most, but not all, were accomplished, requiring new benchmarks to strive for.
So while benchmarks have a place, we need to be very, very careful with them. They are often manipulated, artificial or irrelevant to our own circumstance. Any benchmark not rooted in your own story is a problem. Choosing the wrong benchmark leads to false narratives. Sometimes they create feelings of superiority, infallibility and erode a healthy sense of humility. Other times, an ill applied benchmark causes disappointment, discouragement and sometimes defeat.
“Any benchmark not rooted in your own story is a problem”
Let's use a real life example shall we? Last quarter was the best investment quarter (by certain benchmarks) since 1997. One may be tempted to read such headlines and then compare that to what they experienced last quarter and feel quite despondent. By applying a false benchmark to their own circumstance they feel upset, cheated, even angry. They blame themselves, their advisors, the president, the virus, or party they didn't vote for.
All of that is misplaced and usually leads to some classic, well researched, bad investing behavior. Why? Because,for example, the Nasdaq 100 is not a relevant benchmark to your circumstance unless the only investment you own was one that precisely tracked the exact 100 companies represented in said benchmark (you can't invest in a benchmark, even the best index has tracking errors). So let me repeat, any benchmark not rooted in your own story is a problem.
This is true not only in the world of investments. It is true of life. In a world saturated with images, it is too easy to create a benchmark for your life that is not rooted in your story. It is too easy to take the carefully crafted (and edited) imagery of someone else's story and apply it to our own and in doing so, we sacrifice our unique and authentic self for one whose story we only know, at best, in part. Beholden to a benchmark not your own is to give away the freedom to be who you actually are.
The 4th of July is most often thought of as a celebration of freedom. My family's observance will not be like those in the past. Sometime tomorrow, I will get a notification on my phone reminding me of the 4th of July celebrations gone by. I will be tempted to yearn for days when family and friends gathered freely without fear of catching a novel disease. I will be tempted to despair at how my pant size hasn't changed in a decade when I decided to overweight the waist of my bodily portfolio. I may feel envy when I see someone on my timeline, who is has better abs, or seem to travel to nicer places, or live in better houses, or have kids from Lake Wobegon, who are always above average.
When that notification comes, I will have a choice. I can choose a story that is not my own and apply a benchmark that is not relevant to my life. OR. I can create a benchmark crafted for my story, because the only real return that matters is the return you get on your life.
I hope the latter is what you choose and if you do so, memorialize in a picture, upload it in the cloud, share it if you so choose so that I can celebrate your story while being free to champion my own.