Decisions VS Outcomes

Decisions vs. Outcomes

David B. Armstrong, CFA Weekly Market Commentary

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Process is important to us here at Monument and it should be important to you, too.  Processes are especially important in the financial advice world because decisions cannot be justified merely because they worked.

Why? Because outcomes are not always a validation of good decisions.  

Take speeding, for example.  Just because you sped from D.C. to Miami without receiving a ticket or getting into an accident, it does not make that decision a good one.  The reality is that you increased the probability of a bad outcome…it just didn’t happen.

Another way to look at this is by considering how casinos operate. They make money because the odds are stacked in their favor over the long-run.  There are opportunities for people to make stupid, low-probability bets on every game of chance on the casino floor—and every now and then they pay off big to the gambler.  But hitting that winning outcome does not mean it was a good decision for the gambler.

While the casino obviously cares about outcomes, they know that it’s the process that assures their financial success over time. They know that if they have a good process, good outcomes are “earned success” and bad outcomes are simply “bad luck.”

What about having bad processes or no processes?  Well when a bad/no process results in a good outcome, that’s just plain old “good luck.” When a bad/no process results in a bad outcome, that’s what some would call Karma or “just punishment.”

The world of investing is one of ambiguity.  Of uncertainty.  What happens in the market is out of everyone’s control—including ours.  Especially ours.  What is in our control is our process.  Just like the world a casino lives in, the odds are stacked in our favor as investors.  According to a Morningstar report dated December 31st, 2014, 94% of the rolling monthly 10-year returns from 1926-2014 are positive.

Just like the casino doesn’t win every hand, neither will our clients or our readers (we call them “future clients in waiting”).  Casinos and Monument know we will experience some bad outcomes despite having a good process.

It’s easy to get all wrapped around the axle on investment outcomes we don’t have any control over…both the winners and the losers.  That’s a natural reaction.  But remember that it’s the process that we have the most control over.

If you are reading this and feel like the process is not your focus or your current advisor’s focus, please reach out to me directly— we can help.

Keep looking forward,



Important Disclosure Information

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. All indexes referenced are unmanaged and cannot be invested into directly. The economic forecasts set forth may not develop as predicted. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Monument Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Monument Wealth Management’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

About the Author
David B. Armstrong, CFA

David B. Armstrong, CFA

David B. Armstrong, CFA, is a President and Co-Founder of Monument Wealth Management. Along with his role as the firm’s chief investment strategist and portfolio manager, Armstrong is viewed as an industry leader in several areas including innovative practice management, discretionary asset management, digital marketing and social media. Dave is the writer of Monument Wealth Management's weekly "Off the Wall" Financial Blog and Market Commentary, and is frequently sought after by journalists and event coordinators. Visit his full biography here.

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