Possibility vs. Probability

possibility vs probability

My wife is battling cancer.  Over the past three months we have endured this nightmare.  After two grueling surgeries and radiation, she has been deemed “cancer free.”  But no one is ever really cancer free.  All it takes is a single cancer cell to float through your body and settle someone else…

Advances in medical technology are amazing.  We have access to data that can show my wife and me the probability of her living another ten years.  Based on hundreds of thousands of other cases of breast cancer, we are able to pinpoint her odds.  She has a 93% of making it.

What does this have to do with investing?  Good question.

It has to do with probabilities versus possibilities.

On nearly a daily basis, I hear the same refrain from my clients.  “Dave, you never know.  The world seems like it is such a mess right now.  I am scared.  I don’t want to lose my money.”

Yes, there is a possibility that we will experience an economic catastrophe like never before.  I don’t know.  Nobody knows.  But what is the probability?

Besides the Great Depression, I cannot find a time in the past 100 years where a prudent, balanced investment strategy didn’t result in a successful retirement.

So, unless we experience something akin to the Great Depression, time-tested investment planning has worked every single time.

So what’s my point?

You have a choice.  You can live with the 5% possibility that we are going to experience worldwide economic collapse (I would argue the chances are much lower than 5%)

Or, you can live in the 95%  probability that everything will work out just fine.

I can’t live my life worried about the 7% chance my wife is going to die in the next ten years.  I have to choose to live in the 93%.

It is no different than you trusting your investment strategy, turning off the news, and living the life you deserve.


Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. Indexes are unmanaged portfolios and individuals cannot invest directly in an index.  Actual results will vary.

This communication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any securities or product, and does not constitute legal or tax advice. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel.

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