I understand the appeal of exuding confidence, especially during these challenging times. You’re inundated with questions from worried investors. They expect you to have answers and to express them with authority. I get it.
Here’s the problem. There’s a lot you don’t know, like:
- The direction of the market;
- Which asset class will outperform;
- How to select stock “winners”
- How and when “factors” will impact portfolios.
Even in “normal” times, you don’t have predictive ability. That’s the reason many of you avoid stock picking, market timing and trying to select outperforming actively managed funds.
Having humility about your limitations is a virtue. Not something to be hidden. That’s why I’m making this recommendation, which you may find shocking: Discover the benefit of lower self-confidence.
As I explain in my new book, Ask: How to Relate to Anyone, there’s considerable evidence having low self-confidence makes you more aware of your shortcomings. The ability to be self-critical can propel you to achieve success. Those who brim with self-confidence tend to ignore negative feedback and can come across as arrogant. They are also less likely to accept responsibility for errors, and more likely to blame others for mistakes.
Low (but not too low) self-confidence can make you work harder to achieve your goals. You’re more motivated to put in the time and effort to improve.
This is probably the first time in your life anyone has advised you to work on reducing your self- confidence level!
The virtue of vulnerability
An appropriate level of self-confidence allows you to project vulnerability. The benefits of doing so has been documented by Brene Brown, Malcom Gladwell and executive coach David Brendel.
In an excellent article summarizing this research, Brendel notes: Many of my clients have achieved remarkable success by apologizing for errors, seeking help from competitors, and otherwise expressing vulnerability.
Maybe projecting the image of the all-knowing financial guru isn’t all it’s cracked up to be.
Resource of the week
I recommend this article on vulnerability in the Harvard Business Review by David Brendel, MD, Ph.D.