Jake Wilkerson

Erin Workman
Enc 1145
28 October 2014
Investment through Reflection
Money is something that we can never get enough of no matter what people say or tell
themselves to believe, the good majority of people will always be wondering what life would be
like with more money. I too have already had this question constantly thumping through my head
at a young age so I decided that I would spend my life engulfed in the field of finance. Money is
something that constantly consumes people life whether that means that they are thinking about
ways to spend it or figuring out how they will obtain enough of it to make ends meet. Because it
is common ground for every civilized human being, I felt like it is something that will always be
needed as long as transactions are taking place. Going off of that, another practice that will
constantly surround our lives is communication through words and texts. People always need to
discuss innovative ideas with one another and talk about how times are changing for better or
worse. Communication is something that makes our markets function because money cannot be
earned or spent without it. As a result of this thinking, I wanted to try to look at these two lasting
ideas from a new perspective. Since two concepts have and will be around forever, I thought that
there had to be ways that they could be used together to in turn benefit each other. To explore the
relationships between reflection and investments even further, I will begin by discussing the
basics of finance and the purposes for reflection to take place. After providing a general
understanding of my intentions, I will outline the benefits of reflection on investments to display
what can be gained and lost from looking back at ones actions, which will eventually lead me to

consider the ethics involved in business practices and exactly explain how important writing and
communication is in the financial process.
Investing is a field that is extremely high paced. Every second matters because it could be
the determining factor for a shareholder ending their day in the glorious green numbers our
rough red. In the same measure, some investors look at making money as a race against the
clock. For example, day-traders are people that utilize every second out of the working day in an
effort to maximize their daily earnings. Putting this all into perspective, it would make sense why
taking the time to reflect upon investments would be an out of the ordinary thing. Even in
everyday life people are always wanting to rush onto the next thing in hopes of them stumbling
upon something bigger and better in the near future. However, wouldnt it be worth it to take a
little time to look back at investments if it meant that returns would be larger and more
consistent? This is something that I thought seemed logical so I felt it was something that needed
to be addressed. Not only that, but when the process of reflection is carried about people will
gain more knowledge as a whole just from going back through their actions and seeing what
moves were pluses and minuses. The process of reflection involves individuals taking the time to
really sit down and look at trends that they feel are meaningful. By doing that people will learn
more about their own tendencies and what advantages they could gain. Jae Jun, a long time
personal interest investor attests to this when he mentions, Investing has broadened my mind by
forcing me to think in different ways and to look at a situation from different angles and
perspectives (1). He wants people to know that there can be more benefits than just gaining
money through the process of investing. Reflection is something that needs to be done when
dealing with investments because it can provide more benefits than expected. There are endless

ways for people to work on self-improvement and this is just one of many. Something so simple,
and effortless needs to be something taken seriously.
Apart from the main purposes to carry out a reflective aspect of investing, there are also
several tangible benefits that can be achieved through this process. By putting in work to show to
others about the advantages of investing, this will encourage more people to begin to invest their
money at an earlier and earlier age. One of the essential points to the investing process is giving
your money time to grow, so if kids started investing money at the age of 18, they would be
maximizing the time span for their money to continue to accumulate. In an article on Investopia,
a common resource for financial terms and basics, it reinforces this thought when mentioning,
The magic of compounding allows investors to generate wealth over time, and requires only
two things: the reinvestment of earnings and time (Folger 1). A well thought out reflection
would provide individuals with a more than eager mindset for the future. After sitting down with
my dad, a private wealth manager for over 20 years, to briefly interview him on his thoughts
about how reflection plays a role in the industry. He constantly referenced how if he knew to
start at as early of an age as possible he would have near double the money he has now (see Fig.
1). He said that reflection is something that needs to become more prevalent in investment work
because while it would provide benefits for the person doing the reflection, the greatest
beneficiary would be the ones learning from the mistakes of others. Looking back at his
comments I thought he made an interesting point by explaining how incorporating writing in an
almost writing-less industry would install a pay-it forward mentality. The benefactors would
come from a variety of different outlets, but the information would stem from the same, similar
sources.

The benefits that would come from the process of reflection on investment would be
abundant, but another important one would be realizing the constant mistakes that keep
occurring. Taking the time to look back at which investments performed poorly and which ones
returned value would lead to a better investing experience in the future. Reflection equals
understanding so it seems obvious that this would be a more common occurring function. In an
investing article by Daily Capital, they look back at their previous investment and try to provide
remedies for the problems they noticed. For example, they mention things like, Having too
much cash in their portfolio and Owning too many mutual funds at the same time
(Investment Mistakes and Remedies). They then go on to provide plausible solutions for these
problems and continue to discuss them in depth. While writing is known to be used extremely
minimally in the field of finance, I found that in this situation, writing is the driving force for
correction. When writing takes place, people subconsciously slow down and realize the glaring
errors they did not notice before. It lends people to actually think about what is taking place, and
with that, give them a source of self-improvement.
When the word investing is first mentioned in a conversation there are many words that first
jump into peoples minds. Most people instantly imagine the madness of the New York Stock
Exchange on a busy day or skyscrapers in New York that tower over the pedestrians looking up
from a far. No matter what images come into individuals minds, there will always be exceptions
or unusual concepts that are forgotten. In this scenario, I wanted to look at investing a little bit
differently and analyze how reflection on investments change when humans are what money is
being spent on. When we start to look at human lives, our values and priorities begin to alter.
People not only continue to think about themselves, but if a group of people benefit more than an
opposing group, disagreements instantly occur. Also, investments in man can never really be

directly traced back to a point where humans are given money, instead improvements in human
populations usually occur in a cause and effect type of way. The use of reflection in these types
of investments is essential to improving our country as a whole because we need to look back
and see what areas need improvement. For example, investing in education is something that can
provide long lasting effects in many different ways than anticipated. When looking back to the
US economy from 1957 to 1930, Theodore Shultz in his article Reflections on Investment in
Man, provides the statistic, The estimated return to this additional educational capital in the
labor force would appear to account for about one-fifth of the economic growth for that period
(4). If the time wasnt taken to look back on how these years were impacted by investment, it
would be impossible to see the recurring effects of putting money into something different than
just a company. No matter the type of investment, taking time to analyze the actions and effects
of an investment and put those down into writing can never be overestimated.
While I continue to sit here and insist that reflection and writing are something that need to
become more prominent, there will always be others that feel differently. By sharing other points
of thought, I plan on providing an even greater analyze as to why writing is crucial to finance.
The main argument that I continue to find about spending time providing a well thought out
analysis to an investment, is the thought that time is being wasted. People believe that there are a
million better things they should invest their time in, rather than looking back on the past. Also, a
common refute for this procedure is that looking back will leave investors with a depressing
sentiment that will discourage future deposits in the stock market. A British personal finance
investor describes the emotions of one of his 40 year investments when explaining, I look back
at Pochins (the company he invested in) with mixed feelingsIt could have been worse, but it
could have been a whole lot better too (Lee 1). Looking back at something that didnt exactly

pan out the way you wanted it to will always bring up a large variety of feelings, but even
reactions that drive up emotions filled with sorrow can still bring benefits for the future.
Negative emotions will more likely give a better insight for the future anyway because they will
offer someone caution and advice for how to avoid those mistakes when it comes time to put
more money on the line in the future. While writing about the outcome of investments may seem
irrelevant to some, there simply is no other way to improve upon previous actions if you dont
put the effort in the see how mistakes can be avoided.
To continue the discussion why writing should serve as an essential to anything event
involving a risk of money, is to look at the situation of investing in life insurance. Life insurance
is something that in a worst case scenario would be the only thing that a family would be left
with. It is almost impossible to determine the wealth of someone in 30 years but companies are
given the task of doing it and individuals have to determine which route would be best for their
dependents if they no longer had the opportunity to provide for them. With all that said, life
insurance is something that can only be evaluated how well or poorly it is after the person that
invested in it has passed. Because of all these special circumstances, one has to rely on the
insight of others for them to make an educated decision when it comes time for a young adult to
make a choice. Not only that, but most individuals feel that life insurance companies mainly
operate in the area of self-interest and more than often are just worried about how the plans will
benefit them. E.H. Lever, a specialist in the business of life insurance, expands upon this thought
process in his academic article when he states, By the very nature of their business (lifeinsurance companies), are compelled to interest themselves in the problems of the long term
investments, and it is worthwhile, therefore, to enquire whether the ordeal through which they
have passed has revealed any defects (10). The key parts to take out of this quote is that not

only will companies solely worry about themselves, but its essential to determine whether their
process of determination was legitimate. In other words, the author of this article is emphasizing
how taking the time to review and determine what a fair plan is, is the only thing that keeps the
companies honest. Writing is what spreads opinions about issues like this and allows people to
have the power to keep an industry regulated. Without writing and reflection prominent in the
field, corruption and fraud would run rampant.
A common trend that consistently comes up when referencing reflection in terms of finance
and investing is the differentiation between long and short term investing. For whatever reason,
people always want to believe that in short term investing thought and reflection rarely take
place, and short term investing is always about trying to flip an investment as quick as possible
and maximize the return to its greatest value. A financial analyst, Jack Treynor, even attests to
this when he makes mention how people divide investments into two categories, those whose
implications are straightforward and obvious, and those that require, reflection, judgment, and
special expertise (56). While I think those are common characteristics of short and long term
investments, I feel that the different types of approaches for the two should not be so varied. At
the end of the day, with both of these type of expenditures people want to make the most amount
of money as possible with the minimum headache involved. Because of this thought process,
people should not differentiate in the way they want to attack different types of investments.
Reflection is necessary whether an individual plans on holding an acquisition for two days or
two months. In order for a person to obtain the greatest return possible they need to sit down and
think about all the possible courses of action and what consequences will result with those.
Making a financial decision under pressure and as fast as possible is something that is ill-advised
and cannot be justified when putting someones financial stability at risk. Treynor later goes on

to summarize how, People who choose to invest long-term, are more concerned with the
evaluation of the market, rather than the benefit to the individual (57). While market evaluation
definitely occurs in all aspects of finance, if this was the main goal for investors then they would
not be risking their hard earned money just for the sake of understanding. Especially when this
knowledge could be gained in the exact same way if advisors just analyzed how valuations
changed over time. The writing that is prevalent in this, is describing how short and long term
investments differentiate from each other. With the knowledge gained from the research and
explanation of the differences, individuals can have a more complete understanding of the two
options and gain a better feeling for what is involved.
The final point that needed mentioning when relating writing to investing is how they both
contribute to keeping the financials of businesses ethical. If these two practices werent prevalent
in the world of finance there would be very little regulation of the industry and almost nothing
would have to be kept track of. While I quickly mentioned this early on, this is such a crucial
point to keeping our economy afloat that I felt the need to reinforce the issue. Putting
transactions on paper are the only form of documentation that are required by government
regulatory agencies such as the SEC and the Better Business Bureau. In an article that discusses
Keeping Ethical Investments Ethical, it carries on a conversation about how the financial
sector has major impact on the rest of the state of the environment and how, the financial
sector must shoulder some of the responsibility to shift economic activity towards sustainable
development (Richardson 555). Keeping investing ethical is not an easy task, especially when
there are multiple routes for people to break the system. People are constantly looking to take the
easy way out in everything possible and that itch to do the wrong thing is even more powerful
when millions of dollars could be the outcome. Richardson constantly wants people to know that

you can never be too careful when it comes to people gaining and losing money, so he loves to
put an emphasis on the power of reporting. (Richardson 555). The more in depth and thought out
financial breakdowns are the bigger the challenge it is to launder money. People need to realize
the importance that detail and precision have when dealing with money being exchange. Ethical
investing is something that has driven our economy for generations and if we let the legalities of
it falter, our whole economic system would take a hit. Security is usually designated to some
innovative, high powered machine that seems to be unbreakable, but in the financial industry, it
comes down to writing.
To conclude writing surrounds our everyday lives in more ways than we ever could have
imagined. Such an ancient form of communication that has been around essentially since the
beginning of human life is still just as important to people in the technology driven era as it was
500 years ago. In the field of finance, writing and reflection can provide endless insight into how
people should invest their money and what knowledge can be gained by looking back at previous
mistakes. If people take the time to analyze how in reality every type of investing essentially
boils down to the same goals, then constant errors would be avoided and effective methods could
finally be established.

Works Cited
"Beginning and End IRA Amounts." JP Morgan Chase.
Folger, Jean. "5 Advantages Of Investing In Your 20s." Investopedia. Web. 15 Oct. 2014.
Jun, Jae. "How to Invest in the Stock Market-Reflections." How to Invest in the Stock MarketReflections. Web. 15 Oct. 2014.
Lee, John. "Reflecting on a 40-year Investment - FT.com." Financial Times. Web. 15 Oct. 2014.
Lever, E. H. SOME REFLECTIONS ON LONG-TERM INVESTMENTS WITH PARTICULAR
REFERENCE TO THE BUSINESS OF LIFE ASSURANCE. Cambridge University Press. Web.
15 Oct. 2014.
"Reflecting on 2013: Investment Mistakes and Remedies - Daily Capital. Daily Capital. Web.
15 Oct. 2014.
Richardson, Benjamin J. "Keeping Ethical Investment Ethical: Regulatory Issues for Investing
for Sustainability." Springer.. Web. 15 Oct. 2014.
Schultz, Theodore W. "Reflections on Investment on Man." The University of Chicago Press.
Web. 15 Oct. 2014.
Treynor, Jack L. Financial Analysts Journal. CFA Institute. Web. 15 Oct. 2014.