The Secrets of Investing – You Don’t Know, What You Don’t Know

One of the most famous stories in the history of philosophy is Plato’s allegory of the cave. If you don’t remember the story, I’ll give you a summary. Plato sets the scene by describing a situation in which all the members of a society are chained to a cavern wall so that they can’t move or see anything except for what is right in front of them. On the opposite wall, then, they see shadows moving back and forth. From the time they’re born until the time they die, all they see are these shadows.

But, where are the shadows coming from? Up above and behind them are other people walking along a pathway in front of a large fire. The fire casts shadows of these people onto the far wall for the prisoners to see. Thus, that explains it. That’s where the shadows are coming from. But, then Plato poses a question: if all the prisoners ever see are the shadows of the people, won’t they believe that the shadows are actually all that there is? In other words, the prisoners will believe that what they’re seeing aren’t the shadows of beings but, rather, the beings themselves.

Now, here’s the interesting part. Plato proposes that one of the prisoners breaks free and makes his way upward. He sees that the shadows aren’t real in and of themselves once he observes the people moving along next the fire. Feeling sympathy for his fellow prisoners, he decides to go back down and try to set them free. Do the prisoners shake off their shackles and follow him to freedom? No! On the contrary, they scoff at him and tell him to leave them alone. They think he’s gone crazy! The shadows they’ve seen their entire lives, they reason, could not possibly be a lie…

If you have made it this far you are thinking so what does Plato’s story have to do with investing? It’s simple. Many of us in the world of investing can easily find ourselves prisoners to the ideas of financial pundits in the media. If we’re told that something is true with enough confidence and repetition, we tend to simply believe it without questioning it. We think that because we’ve followed all of the projections and discussions in the financial media, or that we’ve read all of the material given to us by a financial analyst, that we’re informed. But, here’s the problem: we don’t know, what we don’t know.

It turns out that there is a whole world of scientific research done on investing in the world of academia. Professors at universities and PhDs for research institutions have been studying investing and publishing their work in scholarly, peer-reviewed journals for decades. Why don’t we ever hear about it? When the truth is buried, it’s usually because someone has an incentive to keep it a secret. Many financial analysts and advisors make a living off of preying on what investors don’t know. The more you can be kept in the dark, the more money they can make.

Don’t be fooled by the people who tell you they’ve got it all figured out–even if that makes you feel like you’ve got it all figured out. There is always more to learn, and it’s best discovered through the research that isn’t trying to sell you something. If you need any help discovering the real research that has gone on in the world of investing, feel free to reach out to us for a free consultation. We would love to help you break free and find the truth about investing, so that you can truly create what you’ve DREAMED for yourself.