The Independent Market Observer

Are Happy Investors Better Investors?

Posted by Brad McMillan, CFA®, CFP®

Find me on:

This entry was posted on Aug 1, 2014 11:55:24 AM

and tagged Commentary

Leave a comment

happy investorsI'll be out of the office for a few days, so I'm revisiting some of my past posts. (Today's originally appeared in July 2012.)

One of the great perks of my position at Commonwealth is the chance to talk with experts in a wide range of fields. A couple of years ago, at our Chairman’s Retreat, we heard from a speaker who specialized in the psychology of happiness.

I have to admit, I was skeptical. Yet, as he spoke, I was won over by his approach to the topic: what you can actually do to make yourself happier and what that means for your life. The idea is to focus on small changes that are easy to implement but capable of making measurable improvements in your life and career. The gentleman’s name is Shawn Achor and the book is The Happiness Advantage, which I highly recommend.

Small steps, big rewards

I don’t want to recap the book here, but one point worth noting is the power of habit.

Since hearing Achor’s presentation and reading his book, I’ve been focusing more on developing good habits over time. Exercise is one; meditation is another. My most powerful new habit, though, is doing daily gratitudes. Every morning, I write down at least three things I’m grateful for.

Achor cites evidence that this type of activity can lead to significant performance increases. In my case, I believe it’s done that, as well as making me more focused and generally content with my life.

Another approach, suggested by Kol Birke, my Commonwealth colleague and a financial behavior specialist, is to look at what’s going right. After talking with Kol, I added a “going right” list to my morning routine, and I think it will also prove valuable over time.

Exercises like this can temper our obsession with the day to day and encourage us to take a bigger-picture view—whether we’re thinking about our portfolios or our family life. Achor’s suggestions are well worth a look, both in an investment and noninvestment context.

Subscribe via Email

Crash-Test Investing

Hot Topics

New Call-to-action



see all



The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly in an index.

The MSCI EAFE (Europe, Australia, Far East) Index is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.

One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.

The VIX (CBOE Volatility Index) measures the market’s expectation of 30-day volatility across a wide range of S&P 500 options.

The forward price-to-earnings (P/E) ratio divides the current share price of the index by its estimated future earnings.

Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided on these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.


Please review our Terms of Use

Commonwealth Financial Network®