Hindsight Isn't Always 20-20

You hear it a lot:

Hindsight is 20-20

But it's simply not true most of the time.  But we fool ourselves into believing it.

If I had pulled out of the stock market on Monday, I would have avoided the downturn.

If I had not gone to the store, I wouldn't have been robbed....

It's only part of the story

The other part of the story nearly always assumes that a different outcome would have been better.  While that can be true, it's just as likely to not be true.  The fact is this ... we simply don't know.  But human nature has us believing the best outcome.  Humans are optimists by nature and when there is an unknown choice, we assume they are good choices.

So back to our scenario.  What would have happened if we had pulled all of our money out of the market before a downturn?  We assume that we would have preserved our investment, but there is a chance that we could end up worse off.  We could incur some large capital gains which triggers high taxes.  Maybe we lock in losses that we really can't afford.  Or perhaps the money down the road gets reinvested into other stocks or investments that ultimately do worse than the downturn we avoided.

How about that trip to the store? Five minutes later, you may have avoided the robbery. But maybe the firetruck that went through the intersection would have broadsided you.  Sure you wouldn't have been robbed, it's likely you would be dead.   I wouldn't chalk up that scenario of 20-20 hindsight into a positive outcome.

Who Gives A Hoot About Hindsight?

Regardless if our hindsight was 20-20, what good does it do?  It's all in the past, without any allowance for change.  A retrospective viewpoint only provides us with the realization of a good - or bad - outcome.  We can learn lessons from review of what we have done, and that is good.  History is there for us to learn from, not ignore. But painting a rosy picture in 20-20 hindsight doesn't provide us with any benefit.  Nor does boasting about a positive retrospective outcome.  The past is over and can't be changed.

What About The Future?

The future is malleable.  We can influence what happens in the future.  We certainly can't predict it with accuracy, but influence is possible.  It's better to spend our time and energy in making educated choices about what we do today to influence our future, rather than spend that time and energy on hindsight evaluation. 

When we think, "If I only had....", we should stop ourselves and spend that time on making better decisions NOW to improve our future. 

It's better to spend time thinking and making better choices for the future than to spend time wishing you had done better in the past.   - SGR