One of the things that make humans human is the tendency
to seek out patterns. In fact, we often spot coincidences and
call them patterns when none in fact exist.
Our pursuit of patterns can lead us to define the recent past
as the "new normal," a definition that can vary greatly based on
When we get focused on the new normal, we forget to think
about the possibility of surprises. After all, our brains
naturally want to cut through the complexity and settle into
But the reality is that surprises will happen no matter how we
define normal because life has no set or guaranteed pattern.
Surprises interrupt our definition of the new normal and cause us
to reset our expectations.
If history tells us they will happen, though, why are we so
surprised by the surprises?
There are at least two reasons:
- The origin of the next surprise often looks different than
the last one.
- The longer and more pronounced a new normal seems, the less
it takes to surprise us.
Nassim Taleb illustrates this problem with the story of a
turkey. For every day of a turkey's life, he's fed on a regular
basis and comes to expect that his daily pattern of being fed is
a general rule. Imagine this turkey's surprise on the Wednesday
before Thanksgiving when this pattern changes.
The turkey had no reason to think the pattern would change.
Yet it did just that with no warning, and with serious
consequences for the turkey.
Clearly, you don't want to be a turkey.
Granted, we're often asked to make decisions, particularly
financial ones, based on a degree of uncertainty. To counter this
uncertainty, we commit one of the classic behavioral mistakes by
looking to the recent past, identifying a pattern and projecting
it into the future. The danger of this behavior is that we're
making decisions based on the new normal and often fail to
include the potential for surprise.
As you make plans, it's worth evaluating your current normal.
How are you spending your money? How much are you saving? How are
you investing? Maybe you don't need to make any changes, but it's
worth considering whether you have a backup plan for the next
Because it will come, after all. We just have no idea what it
will look like.
A version of this post appeared previously at
The New York Times
Carl Richards is a financial planner and the
director of investor education for the
, a community of more than 130 independent wealth
management firms throughout the United States. Visit
for more of Carl's sketches and writings.
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