A Voltairean Perspective on Investing

Amar Pandit , CFA , CFP

In the world of investing, uncertainty is a constant companion. A quote attributed to the French writer and philosopher, Voltaire, offers a profound insight into this aspect: Uncertainty is an uncomfortable position. But certainty is an absurd one.’

Yes, uncertainty is uncomfortable…therefore we crave for certainty…

This pursuit of certainty can lead us down a path of suboptimal decisions. For instance, in an attempt to combat lifestyle inflation, individuals might flock to fixed deposits or other fixed-income securities, seeking the comfort of guaranteed returns. However, this strategy often fails to keep pace with inflation over the long term, eroding the real value of their savings. Similarly, waiting for the “right time” to invest can result in missed opportunities, as timing the market is notoriously difficult and often counterproductive.

If you  knew the exact date by when the Sensex would hit 700,000, you would be fine to invest at any level, whether it’s the current 72,500 or 80,000 or 100,000. The exact entry point wouldn’t matter because you’d have the certainty of reaching your goal.”

But not knowing the future date makes us uncomfortable..

The wisdom in Voltaire’s words lies in embracing the inherent uncertainty of the market. Instead of seeking false certainty, investors should focus on building a diversified portfolio that can embrace uncertainty  and deliver long-term growth . By accepting uncertainty as a fundamental aspect of investing, we can make more informed and rational decisions, rather than being swayed by the emotional desire for absolute certainty. This approach not only mitigates risk but also positions us to capitalize on the opportunities that uncertainty inevitably brings.