Albus Dumbledore could have given sage investment advice. He was an incredibly wise man. Fictional, yes. But his character could give wise investment advice that many should strive to incorporate in their approach to saving for the future.
Here are four key pieces of investment advice and how Dumbledore may have addressed them.
Everyone has second thoughts
Dumbledore was no stranger to adversity and worry during his lifetime. He lived to be about 115 years old before Snape cast the killing curse upon him on the Hogwarts’ astronomy tower. He approached almost every circumstance with levelheaded logic—even his death.
In our lifetime, we have never faced the chaos of a pandemic or the current level turmoil of civil unrest. We should remember that it is natural to feel worried. It is natural to second-guess our decisions.
Even experienced investors feel the angst of emotions from a falling market. Most of us have heard the stock market has always come back from huge declines of the past. But we still feel torn. Perhaps if we are calm and think about these words from Dumbledore, it will help. “Clever as I am, I remain just as big a fool as anyone else.” (Rowling, 2016) When it comes to investing, keep your emotions in check and, for investment advice, find an advisor to talk through your financial concerns.
Are you your own worst enemy?
The stay-at-home phenomenon has changed some people’s investing habits. Many have turned to the internet for investment advice. There has been no shortage of YouTube videos that will help anyone make a fortune at trading stocks. And we all know that everything on the internet is true, right?
Perhaps it has been boredom. Maybe it has been financial desperation. But an unprecedented number of people have turned to invest in individual stocks during the coronavirus pandemic. Lucky for them, there has not been a lot of market turmoil. But that will not always be the case.
Regardless if you are a novice or experienced investor, reflection on investing decisions is always prudent. Resist trading on rumor or unproven tactics. When a difficult decision confronted Harry, Dumbledore gave him this advice. It can apply to investing and many other parts of life. “It is our choices that show what we truly are, far more than our abilities.” (Rowling, 2000)
Strategy beats dabbling
Have you ever started a project and never finished it? Who among us has not? One of the most important lessons that anyone can learn in life is this. Anything worth having in life is generally harder than we expect and takes longer than we anticipate. Planning your finances is no different. A planned financial strategy usually beats a random approach. Yes, there are those people that happen to do well at investing in the short run. As the saying goes, even a blind squirrel finds a nut every once in a while.
If you read Harry Potter and the Goblet of Fire or saw the movie, you will remember this quote. “We must all face the choice between what is right and what is easy.” (Newell, 2005) FYI, the book quote is slightly different from the movie quote “Remember, if the time should come when you have to make a choice between what is right, and what is easy, remember what happened to a boy who was good and kind and brave because he strayed across the path of Lord Voldemort.” (Rowling, 2002)
We all want what comes easy. Even Eve wanted the easy life when she took the apple in the Garden of Eden. But when it comes to investing, a regular strategy helps focus on long-term goals. A regular strategy is more challenging to stick to. But it pays off more than emotional reactions to short-term market fluctuations.
You don’t have to go it alone
Why do schools exist? Why do apprenticeships exist? What is the purpose of a mentor? We cannot know everything. That is the bottom line. We do not have to go it alone in life. In “The Jungle Book,” Mogli had a difficult time adapting to society because wolves raised him. In “Tarzan of the Apes,” Tarzan struggled with humanity because apes raised him. Yes, there were storybook benefits to being raised by animals. But to function in modern-day society, we must depend upon the knowledge of others. Not only can we learn from the experience of others, but we can also learn from their mistakes.
When J.K. Rowling created Albus Dumbledore, she knew that everybody needed a guide in life. Dumbledore was Harry Potter’s guide. Not only for moral support but for his knowledge and experience too.
In “Harry Potter and the Goblet of Fire,” Dumbledore bestowed this wisdom to Harry. “We are only as strong as we are united, as weak as we are divided.” (Rowling, 2002)
Keeping on track
When it comes to making critical financial decisions in real life, working with a financial professional can give you a better chance of success. The experience of an investment adviser can give you a sounding board to discuss your concerns. A financial planner can help you keep your emotions in check. They can work together with you to keep your long-term investment strategy on track.
You can learn more about my strategy of helping investors reach their financial goals and guiding them to not run out of money during retirement in this short video.
Rowling, J. K. (Writer), & Newell, M., & Heyman, D. (Directors). (2005). Harry Potter and the goblet of fire [Film]. Warner Brothers.
Rowling, J. K. (2000). Harry Potter and the chamber of secrets. Scholastic Paperbacks.
Rowling, J. K. (2002). Harry Potter and the goblet of fire. Scholastic Paperbacks.
Rowling, J. K. (2016). The tales of beedle the bard: with additional notes by Professor Albus Dumbledore. Arthur A. Levine Books.