Picking a Kindergarten
A few days ago, we dropped our son off for his first day of kindergarten. Here’s our ‘First Day of School’ pic:
Growing up in Boise, we didn’t think twice about which school we were going to; everyone went to the one closest to their house. A limited menu made the decision easier.
These days it’s not the same —at least not here in the Phoenix area. With public, charter, and private options, the spectrum is really open and the decision isn’t quite as cut and dry.
As any parent knows, choosing a school can be both an exciting and nerve-wracking process. You want to get it right (whatever that means).
Naturally, over the last several months we've talked to lots of other parents, each with strong views on why their school choice was best. Some of them --including myself, probably -- even making a sort of 'pitch' for why their choice makes the most sense. In an odd way, you kind of want everyone you tell about your decision to say "that is so smart, I'm sending my kid there too!"
But that doesn't happen, clearly.
This experience reminded me how deeply wired we are for social proof.
We tend to feel safer when making decisions that others have also made. This makes sense: for much of human history, survival often depended on sticking with the tribe.
In a modern context, that same instinct can easily become a trap — Remember the “limited menu” I mentioned earlier? Well, the investment universe is exactly the opposite: a constantly expanding, complex, wasteland of places to put your money.
This is ripe territory for herd mentality to take effect:
…Investors poured money into tech startups with little to no revenue, simply because everyone else was doing it (Dot-Com Bubble — Late 1990s).
…People assumed housing prices would always go up (Housing Crisis — 2006–2008).
…Fueled by Reddit threads and social media hype, retail investors created a buying frenzy in certain stocks with little understanding of the business (Meme Stocks — GameStop, AMC in 2021).
…Or perhaps most absurdly, the NFT craze had people buying pictures of cartoon apes (among other pictures) with slight design variations for hundreds of thousands to be part of an exclusive club — only to watch prices collapse.
Instead of evaluating choices based on our own values and context, sometimes we look to the majority — and unconsciously assume the group must be right. Hindsight can tell a different story.
When lots of people do something, it creates the illusion of correctness. And yet, many of the best, most thoughtful decisions in life — whether about parenting, investing, or whatever — require the opposite: tuning out the crowd long enough to think clearly for yourself.
We chose a school that reflects our family’s values and what we believe will serve our circumstances best. We don’t think that’s the right choice for everyone.
Similarly, we choose investments which we believe serve our (or our clients’) unique circumstances best. One person needs to be heavy into treasuries, another may need to aggressively pursue growth. Each investor is unique.
Whether you’re choosing a school, an investment strategy, or whatever, it's worth remembering: your situation is yours. Your values matter. The best decision is the one you made on your own terms — not because others made it, too.
In short, play your own game.
Best,
Adam Harding, CFP®
www.hardingwealth.com
*Please consult yourself before choosing a school for your kids. Past school choices are not indicative of future school choices.
