Reflection No. 53

Happy Friday, all! Today on Reasoned Reflections we're diving into three key topics: the sweet spot of money and happiness, a fresh perspective on how even small savings amounts can make a real difference, and when owning individual stocks might actually make sense over index funds or ETFs. Let's get to it!

Three Quick Hits:

• Article: Money and Happiness

  Buying more stuff doesn’t make you happier. Having more money doesn’t make you happier either. The sweet spot isn't chasing more for the sake of more, but having enough to cover needs, handle emergencies, and pursue what genuinely adds value to your life.

• Tip: Don’t underestimate small savings. Even $20 today is a down payment on the financial freedom you’re building. Start small, stay consistent, and watch your future grow.

• Quote: “If you want to live a happy life, tie it to a goal, not to people or things.” - Albert Einstein

Two Questions:

• As your income has grown, has your savings rate grown too or just your spending?

• When was the last time you reviewed your benefits during open enrollment to make sure they still fit your life today?

REFLECTION No. 53: Individual Stocks or Index Funds/ETFs?

I - Issue: Should you prioritize owning high-quality individual stocks rather than relying solely on index funds or ETFs?

R - Rule: Investors have the chance for greater long-term returns by identifying and holding standout companies instead of chasing short-term gains or diversifying passively.

A - Analysis: The recent performance of Apple and Nvidia is an example of how patient and selective ownership can pay off handsomely. Both companies have delivered huge gains—driven by innovative product launches for Apple and Nvidia’s aggressive investment in AI infrastructure. Investors who stayed the course, even when there were doubts about market conditions or company challenges, are now reaping the rewards. The roller coaster headlines and market fears didn’t derail either stock, and those who resisted the urge to trade in and out have benefited far more than those sticking only to broad market averages. Another example of time in the market beats timing the market regardless of your investment strategy.

What’s really at play here, however, is the psychological challenge of investing. It’s tempting to react to every swing, but history keeps showing that holding fundamentally strong companies through ups and downs wins out. Index funds and ETFs are still a great choice for those of us that don’t want to spend the time researching the right stocks to buy or can’t stomach the volatility that comes with owning individual stocks. Heck, that’s even the advice Warren Buffets gives and being average in the stock market can still create the financial freedom you long for.

C - Conclusion: Focusing on companies with clear leadership and momentum, investors can ride the wave of great growth; however, this approach takes patience and inaction.