Investment Strategies for People Who Read Too Much Philosophy

Most investment advice comes from economists, financial analysts, or that one friend who's suspiciously enthusiastic about cryptocurrency. But what if we turned to philosophy instead? After spending too many hours in both finance and philosophy classes, I've started to see some interesting connections between philosophical schools of thought and investment strategies.

Here's my tongue-in-cheek (but also kind of serious) guide to investing based on philosophical traditions.

Stoicism: The Original Risk Management

The Stoics believed in preparing for the worst while focusing on what you can control. Seneca—who was actually quite wealthy—advised keeping a portion of your assets in "safe places" while pursuing riskier ventures with the rest.

Stoic Investment Strategy:

• Maintain a substantial emergency fund (because Fortune is fickle)
• Diversify across asset classes (because externals are beyond your control)
• Focus on process over outcomes (because virtue is the only true good)
• Practice negative visualization: regularly imagine losing your investments to reduce anxiety about market fluctuations

As Epictetus might say: "Make the best use of what is in your power, and take the rest as it happens."

Existentialism: Authentic Asset Allocation

Existentialists believe we create meaning through our choices and must take responsibility for them without appealing to external systems or authorities.

Existentialist Investment Strategy:

• Reject following investment trends just because "everyone" is doing it
• Choose investments that align with your authentic values, not what society deems successful
• Accept the "angst" of market volatility as part of the freedom to invest
• Understand that there is no predetermined "right way" to invest—you must create your own path

As Sartre might advise: "When you invest, you invest for all of humanity. Your portfolio is a statement of what you believe humans should value."

Utilitarianism: Maximizing Expected Returns

Utilitarians like Bentham and Mill focused on maximizing overall happiness or utility. In investment terms, this translates to expected value thinking.

Utilitarian Investment Strategy:

• Calculate expected returns (probability × potential gain) for different investments
• Consider the broader impact of your investments on society (ESG investing)
• Balance short-term and long-term utility (the marshmallow test of investing)
• Remember that each additional dollar has diminishing marginal utility (risk less as your wealth grows)

As Mill might say: "It is better to be a human dissatisfied with your returns than a pig satisfied with market-underperforming cash."

Nihilism: The Ultimate Passive Investor

Nihilists believe in the absence of inherent meaning. While this might seem depressing, it can be surprisingly liberating for investors.

Nihilist Investment Strategy:

• Accept that you cannot consistently beat the market (it's all meaningless anyway)
• Embrace low-cost index funds (why try to find meaning in individual stock selection?)
• Automate contributions and rebalancing (free yourself from the illusion of control)
• Ignore financial news and market fluctuations (they're just narratives we impose on randomness)

As Nietzsche might say (before launching a robo-advisor): "When you gaze long into the market, the market also gazes into you."

Empiricism: The Data-Driven Investor

Empiricists like Hume believe knowledge comes primarily from sensory experience and evidence rather than pure reason.

Empiricist Investment Strategy:

• Base investment decisions on historical data and evidence, not theories or narratives
• Remain skeptical of "expert" predictions that lack empirical support
• Update your beliefs when new evidence emerges (Bayesian investing)
• Conduct your own experiments with small portions of your portfolio

As Hume might caution: "Be skeptical of anyone who claims to know where the market is heading next."

Conclusion: The Examined Portfolio

Socrates said that "the unexamined life is not worth living." Similarly, the unexamined portfolio is not worth having. Whether you lean toward Stoicism's risk management, Existentialism's authenticity, or Nihilism's passive approach, the key is to align your investment strategy with your broader worldview.

After all, money is just a tool—what matters is how it serves your conception of a good life. And that, perhaps, is the most philosophical investment insight of all.

Now if you'll excuse me, I need to rebalance my portfolio while contemplating the absurd.