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As we discussed earlier (in the post about being productive while working from home), we’re all under a cloud of uncertainty. It’s not clear when people will start going back to work in the office. Or even if that will happen, since many employees likely will be working remotely for some of the time. Not knowing what will happen next makes financial decision making difficult. 

So, how you can optimize your decisions even when the circumstances are unclear? Fortunately, we can implement some reliable strategies that work under any uncertainty, whether it’s COVID-19 or anything else that life throws your way. You can adapt them to both business and personal decisions.

Take a deep breath to help ease anxiety and read on.


Recognize the uncertainty to avoid trigger decision-making


Sometimes people want to forge ahead with the decision making so they can take action. Humans tend to feel better when they’re doing something. Which is why so many end up selling their stocks when the market drops, because at least they’re doing something to relieve the anxiety of seeing their paper worth drop.

(Remember that your actual portfolio doesn’t drop in value unless you sell and take the loss.)

By acknowledging that you don’t (and can’t) have all the facts, you’re not resisting the logical part of you that knows this. If you don’t accept the situation, the side of your brain that understands you don’t have all the facts will be fighting every decision you make!

“My lesson… is to start every meeting at my trading boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.” – Nassim Taleb, author of Fooled by Randomness, Antifragile and The Black Swan


Examine all the options before financial decision-making


You may already have some thoughts about which way you want to decide. But make sure that you’ve explored every possibility, no matter how remote. Sometimes just taking a contrarian viewpoint helps you understand the possible negative consequences of your preferred course of action. And the positives of taking a different route, so that you arrive at a better-informed decision.


The best way to make sure you’re looking at all the alternatives is to involve other people. Have you ever seen contests with jars filled with some candy or other treats, and there’s a prize for guessing how many are in the jar? Any individual guess is highly unlikely to be right, but the average usually ends up extremely close to the actual number when they’re all combined. 


Use the wisdom of crowds. Invite others to hash out the options with you. If it’s a business decision, get your colleagues involved. If it’s personal, friends, and family. If it’s a financial decision, talk to your financial advisor. When possible, include people that you know have differing viewpoints so that you can understand why they have a particular perspective, which could change your view of the matter.


Spread out the risk

As you know from investing, the more risk, the more opportunity from return. If you can take more chances, you’ll increase the likelihood that you’re right. Give yourself a higher probability of one of your choices being the right one.

You can see this in the NFL. Research showed that over 14 years, the teams that ended up with two “lesser” draft picks performed better than those who had one high pick. They gave themselves more opportunities to do well with two players, rather than relying on just the one to carry them through.

Talk to your financial advisor about how your portfolio is designed for risk. Your advisor should be able to explain the financial decision-making behind your investment allocations and selected funds in your portfolio. 

Know you’ll be wrong and stay involved



We’re all human, which, by definition, means imperfection. Therefore, make your life less stressful from the get-go by understanding that you’re not going to be right all the time. It doesn’t happen. Sure, you can make better estimates and better guesses about the future as you go along.

Absent a crystal ball, you have no way of knowing whether you’re going to be right or not. If you expect that you’ll be wrong, it’s much easier to deal with when it happens.

When you play it safe because you’re afraid of being wrong, you miss out on opportunities. Make room for error in your process, even as you do your best to reduce systematic ones.

Venture capitalists know that three-fourths of the companies that they invest in will fail. So they often get involved with the management of the companies they buy. They help coach the founders and staff through the obstacles that arise. This involvement helps them mitigate the failure and learn what mistakes not to make in the future, even as they understand some of their portfolio won’t make it to the next round of funding.



Decide to learn for better financial decision-making


There are a couple of ways that you can use learning to make better decisions. 

One is to reflect on the decisions you’ve previously made. Include the ones that came out poorly, and the ones that came out well. 

Sometimes the result isn’t tied to the decision. You can make the right decision that doesn’t turn out well for various reasons, including luck. Or you make a decision that had a high probability of succeeding, but end up on the low end of the probability. Even good decisions aren’t guaranteed to come out well 100% of the time.

Review your decision-making process separate from the result. Did you make the best decision you could under the circumstances? If not, why not? What did you learn from the experience?

The second way to make better decisions is to run small tests or experiments before launching a full-scale version. 

For example, rather than ramping up your entire production line for an untested product, run some online experiments to determine if your customers would be interested in such a product. And, importantly: what they would be willing to pay for it. If they’re willing to pay, but the price point is too low to be profitable, you can scrap the idea. Or tweak it into something that people would buy that would still be profitable to you. With modern technology, it’s easy to do this kind of testing.

Or maybe you have a hobby that you’re considering monetizing. Instead of going full-bore on creating an entire line, make some prototypes and shop them around to make sure there’s interest in your items first.

Ideally, of course, you use both techniques. Tests and experiments begin to help you make a decision, and then reflection afterward to pick up on any lessons you need to learn for next time.

If you want to dive deeper into this topic, we highly recommend Annie Duke’s “Thinking in Bets.” This book allows you a peek into the thought process of one of the world’s most renowned poker players.


Would you like Platt WM to help you crowdsource a decision? We’re happy to help our clients think through their business and financial options. Give us a call at 619.255.9554 or email us.



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