Stuck in the Past? Afraid of Change? How Outdated Narratives Can Harm Your Investment Portfolio

February 26, 2024

Depending on your personality type you might or might not be comfortable with change.

Some people dig innovation. They are ready to not only plug in the latest device that comes out seemingly every other month, but they’d plug into the Matrix today if they could.

New = Good.

Others wish checkbooks, check registers, and handshakes for business deals would have never gone away.

Old = Good.

Of course, neither innovation nor age determines the goodness of something in and of itself.

This goes for narratives and ways we think about the world too.

There are old narratives that are true and infinitely precious and new narratives that are true and wonderfully beneficial. Just make sure you aren’t stuck in a way of thinking that is fading or now false.

Examples abound.

If you think the US is as impacted by foreign oil as we were in the past, you may have missed the memo. In reality America is a “production powerhouse” that produces about “13.5 million barrels a day, and we’re heading toward 14 million barrels a day…more oil than any country in the world…[and] we’re exporting more oil than any member of OPEC, save Saudi Arabia.”1

If you think that the United States owes the most money to China, you have misunderstood our present moment. Investopedia notes,

Though China owns a large amount of U.S. debt…the largest foreign creditor is Japan.

China owns around 2.6% of U.S. debt, which it buys because the Chinese yuan is pegged to the dollar. It would be impossible for China to call in all its U.S. debt at once, given the different maturity dates of the U.S. securities that China owns.2

If you avoided tech stocks the last few decades due to the popping of the tech bubble in the early 2000s thinking that technology wasn’t all it’s cracked up to be, you may have missed out significantly in your investment portfolio.

Things change, but minds don’t always.

And that might not be a good thing for your life or your portfolio.

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Sources: 

  1. “How U.S. oil production reached an all-time high in 2023”, PBS News Hour, 12/28/2023. Accessed online: https://www.pbs.org/newshour/show/how-u-s-oil-production-reached-an-all-time-high-in-2023
  2. Investopedia, August 19, 2023. Accessed online: How Much U.S. Debt Does China Own?