When I was 11 years old my family was living in Toronto, Canada. We had recently made the move from sunny Southern California when my dad was transferred by his company. We were a family of 11 children so even though my Dad had a relatively good wage, money was usually tight and on this particular Christmas it was especially so. Our parents told us that with the move and the cost of finding new housing, etc., we should expect our presents to be minimal. When my mom asked me to help select a gift for a brother, she told me that she had allocated $5 per child for presents. We all understood the financial sacrifices of being in such a large family and were accepting and prepared for a light Christmas. I wasn’t sure what my gift would be that year, but I knew it wouldn’t be much.
When Christmas morning came, I arose early and ran into the living room with the other kids once our parents gave the o.k.. Fully expecting to see the modest gifts I knew my parents had bought for some of the other kids, I was completely dumbfounded when I came upon the beautiful sight of a living room filled with presents. Now this is not to say that we had exorbitant gifts since even with a couple of presents per person it always seemed like quite a bit with such a large family. But the gifts we received were well beyond what we had prepared for. I was expecting for myself something small and insignificant but found instead a wonderful electronic football game under the tree with my name on it. It was what I had asked for but had no idea such a gift could be possible. My parents had successfully fooled us all into thinking that we would receive very little. Again, the presents we received were still relatively modest, but by lowering our expectations we children felt it was our best Christmas ever.
I learned an important lesson that day about expectations. In life we often find ourselves excited or disappointed, not based on the actual results of an event, but on how those results match up with our expectations. We can be very happy with just a little if we are expecting nothing. Likewise, I have seen people win the lottery only to be disappointed when they learn they have to share it with other winners. It is all about expectations.
Current investor expectations for 2023 are low. I consider that to be a positive because if we surpass them at all it opens the door for investing markets to respond favorably. That special Christmas morning was the happiest in my childhood because it exceeded my low expectations. I am glad that investor expectations are low for the coming year. I believe it sets the stage for possible surprises to the upside which could bode well for investors.
Dan Wyson, CFP® is author of “The Gold Egg," and “21 Financial Myths” and owner of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 - 435-986-9525 – Securities and Advisory services offered through Commonwealth Financial Network®, member FINRA/SIPC, a registered investment advisor.