It’s nearly impossible to be a successful investor with a pessimistic view of the future.

Despite the incredible and undeniable progress that has occurred over our lifetimes, pessimism still reigns supreme.

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In today's email, I share how our fear of the future and love of the past blind us to the progress we're making every day.

But first...with tax season in full swing, I wanted to share three resources to help ensure you don't miss anything:

1. ​Tax Filing Document Checklist​
2. ​Retired: Reviewing Your Tax Return​
3. ​Working: Reviewing Your Tax Return​

How to Hedge Against "Tail Risk" Tail risk is the hardest to understand and the only one that really matters. Learn why and how to mitigate this risk in your retirement plan. 🎙️ Listen now on Apple, Spotify, and YouTube​

Rosy Retrospection

In 2017, 59% of Americans said that the lowest point in our nation’s history is “right now.”

Sentiment has only gotten worse since then, with 67% of Americans saying that last year was the lowest point in history.

This means the majority of Americans—at least according to these studies—believe that things are worse today than in the midst of WWII, the Cuban Missile Crisis, 9/11, the Great Financial Crisis, or a host of other scary times.

Pretty shocking, no?

While this pessimism contradicts the data, I’m not surprised by it since it’s easy to become convinced that the world is in decline.

All one needs to do is believe that the past was much better than it actually was.

This is what’s known as rosy retrospection.

In other words, if our view of the past is undeservedly positive...

...then our opinion of the current moment and the future is destined to be poor by comparison.

This is exactly why pessimism regarding the future has been a recurring theme throughout history.

Even back in 1830, Thomas Babington Macaulay shared his confusion with the public’s pessimistic outlook:

Regardless of timing, history has rendered all long-term pessimism to be misguided at best, and yet, the trend continues.

If you watch the nightly news for just ten minutes, you will quickly have your preconceived beliefs confirmed that the world is indeed headed in the wrong direction—even if it’s unequivocally not.

But why all the negativity? Because we have problems?

Contrary to what we may like to believe, there will never be a time in which every problem in the world is magically solved.

The fact that problems still exist today doesn’t mean that we aren’t solving problems because we are.

Big ones.

All the time.

A quick look through history will show us that many of the major problems of the past have miraculously vanished.

As one such example, smallpox killed an estimated 300 to 500 million people in the 1900s alone.

Yet, upon eradicating one of the deadliest diseases in human history thanks to a simple vaccine, we didn’t sit around celebrating the fact that we no longer needed to worry about it.

Instead, we turned our attention to solving new problems, just as we should have.

One could argue that our awareness of so many problems today might even be a good thing because, simply stated, without problems, there would be no progress.

Bottom Line

All progress is nothing more than the result of humanity identifying a problem and then spending time and money to solve it.

Once solved, we move on to the next problem and then to the next, barely stopping to catch our breath.

The only difference between the problems we face today and those of the past is that we believe that the problems of the past were smaller than they were.

But the only reason we believe that is because we solved them.

Just as the problems of the past have now been minimized in our memory bank, I believe that we’ll look back at today with similar feelings in the future, thinking that the problems we currently face were equally small...

...if for no other reason than because we solved them.

No matter the size and scale of the problem we solve next, I’m quite sure we will spend almost zero time celebrating.

We’ll be too busy moving on to the next problem while still lamenting that the past was better than the present moment (even if it wasn’t).

Such is life.

The good news is that once you’re aware of this bias, you may become a little more optimistic about the future and, thus, a better investor.

The future is indeed bright, my friends.

Stay wealthy,

Taylor Schulte, CFP®