Cautiously Pessimistic

By John De Goey, CFP, CIM

Special to the Financial Independence Hub

If I had a nickel for every time I heard someone say they were ‘cautiously optimistic’ about one thing or another, I’d be wealthy.  This got me to thinking – why do I never hear anyone say they’re ‘cautiously pessimistic’ when invited to prognosticate about the not so distant future?

Seeing as the future is unknowable by definition… and seeing as there’s a strong consensus that caution is an appropriate stance to take when looking forward, why is there near uniformity that this caution should be tempered by optimism?  Where are the cautious pessimists?  For that matter, where are the reckless people (optimists and pessimists alike)?

The financial services industry is prone to Bullshift – where the glass is always half full and the industry will try to convince you of much no matter what the facts are and no matter how dire the circumstances may be.  Think back.  When was the last time you heard an analyst predict a year over year market decline?

Optimistic Realist?

My point here is that I don’t want to be a downer.  Rather, I want to be a realist.  Heck, some people have even called me an optimistic realist.  At any rate, it seems to me that pessimism isn’t particularly well thought of in my line of work. 

In finance – and especially when giving advice to retail investors – the attitudinal setting is locked and loaded on optimism.  All optimism all the time.  In over 27 years in the business, I think I can count the number of pessimistic outlooks on one hand.

Don’t shoot the messenger for cutting against the grain.  I personally fear the pandemic will be terrifying before the majority of people who need a vaccine can get it.  I hope I’m wrong.  I will say that I am genuinely excited about most of society being immunized by some point near the middle of next year.  Nonetheless, I genuinely fear that we will lose this life or death game of ‘Beat The Clock’.  To repeat – I emphatically do not WANT to lose.  All I’m saying is that I think we will.  If I’m right, there are plenty of people who will lose a lot of money.  Call it an optimism tax.  Like people who refuse to acknowledge they’ve lost an election, a dose of realism could do you a world of good.

John De Goey, CIM, CFP, FP Canada™ Fellow, is a Portfolio Manager with Toronto-based Wellington-Altus Private Wealth Inc. This blog originally appeared on the firm’s “Newswire” site on Nov. 24, 2020 and is republished on the Hub with permission.

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