Optimism

Why is optimism important for an investor? How does one cultivate and maintain optimism?

The very point of life itself is to be an optimist. Why waste your life being pessimistic?

By cultivating optimism we open ourselves up to the abundance that the Universe has to offer. When we are optimistic we also have a tendency to create outcomes and experiences that wouldn’t otherwise exist for us.

It is proven that the more optimistic people are, the more successful they tend to be. A 1980s study conducted by insurer Metlife revealed some fascinating findings:

“Consultants who scored in the top half for optimism sold 37% more insurance over two years than those in the pessimistic bottom half (and) consultants who scored in the top 10% for optimism sold 88% more than those ranked in the most pessimistic 10%.”

The researcher who conducted the study, Martin Seligman, psychologist at the University of Pennsylvania, went on to study optimism scores of sales people in a variety of industries, the overall results were similar:

“Optimists outsold pessimists by 20 to 40%.”

In the stock market, bearish "doom and gloom" content tends to attract more attention and clicks. However, my experience—spanning over twenty years of closely following the markets—has taught me that optimism is the better approach. Historically, the stock market has shown a strong long-term tendency to rise, averaging approximately +8% per year. That’s a powerful upward trend—one we would be unwise to ignore.