The Certainty of Uncertainty

In the New York Times, a couple of months into the COVID pandemic, Mark Lilla wrote an article titled, No One Knows What's Going to Happen, where he said the following: "The best prophet, Thomas Hobbes once wrote, is the best guesser. That would seem to be the last word on our capacity to predict the future. We can't. But it is a truth humans have never been able to accept. People facing immediate danger want to hear an authoritative voice they can draw assurance from; they want to be told what will occur, how they should prepare, and that all will be well. We are not well designed, it seems, to live in uncertainty. Rousseau exaggerated only slightly when he said that when things are truly important, we prefer to be wrong than to believe nothing at all. The history of humanity is the history of impatience. Not only do we want knowledge of the future, we want it when we want it." Lilla wrote this regarding the uncertainty surrounding COVID in May 2020, but I think it has tremendous application to our lives as investors right now as there are many questions for which we'd all like answers. And, of course, we want them now.

• When will this bear market end?

• How much longer will inflation keep going?

• When will we finally see gas prices come down?

• How high will the Fed ultimately raise rates?

• How long will the war in Ukraine last?

• Is the economy heading into a recession?

• And plenty more.

Given these questions, it's clear that the world feels highly uncertain at the moment. To Lilla's point, I'd love to be the authoritative voice you draw assurance from, but I believe any answers professed with certainty about the future should be viewed with skepticism. That said, it doesn't mean you shouldn't feel assured that all will be well. It's much better than that. Your confidence in your financial plan should come from knowing that we planned for this. We did the work required long before today because we knew that uncertainty was the only sure thing. That is all I can truthfully say because investing isn't, and never will be, a game of certainty. We will never know exactly how things will work out, but history has shown that to be unnecessary. Given enough time, these headlines become footnotes in history, and only then can we learn our lessons. It's a twist of irony that faith in the future is best drawn from history. Looking back at any chart of the markets throughout our investing lifetimes, we can see all the times we would have needed to convince ourselves not to sell. And it's evident in retrospect that every time we made that decision, it was proven right. Eventually. While I have no idea what we should expect in the near term, I believe it won't be too long until we're saying that about our current experience as well. Time is on our side.