Optimists live longer. They also invest better

I have written before about a counterintuitive truth in investing: pessimists sound smart, and optimists make money. As it turns out, optimists may also simply live longer – long enough to collect those returns.

A recent social media post drew my attention to a body of research worth careful examination because it connects two things I care about deeply: good health and sound investing. The research by Lee and colleagues tracked participants over a long period and found that those in the most optimistic quartile lived 11 to 15 per cent longer and had 1.5 to 1.7 times the odds of reaching age 85 compared to the least optimistic group. Crucially, these findings held even after the researchers controlled for smoking, diet, exercise, alcohol consumption, depression, BMI and socioeconomic status. In other words, the longevity advantage of optimists was not simply explained by the fact that they don’t smoke and go for morning walks.

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A separate meta-analysis by another group, spanning some 2+ lakh participants, found that optimists have a 35 per cent lower risk of cardiovascular events. Another UCSF lab found that pessimistic attitudes are associated with cellular ageing.

Now, before we get carried away, a fair-minded reading of this research requires an important caveat. Association is not the same as causation. These studies show that optimism and longevity occur together, not necessarily that one causes the other. There may be underlying genetic, environmental and temperamental factors that contribute to both a positive outlook and a longer life. The research is interesting, but it is not a controlled experiment.

That said, one finding from this research is genuinely compelling, regardless of the causation question. The authors explicitly state that optimism is modifiable. It is not a fixed personality trait you are either born with or not.

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The connection to investing is almost self-evident, but let me make it explicit. I wrote about this as far back as 2017, when I argued that the one quality successful investors must have is optimism. Without it, nothing else works. The pessimist always has a reason not to invest: valuations are too high, the global situation is uncertain and this sector looks troubled. And the pessimist always sounds knowledgeable, because there is always some plausible version of the doom narrative available. Today, the fashionable variety is AI Doomerism – the confident assertion that artificial intelligence will destroy jobs, concentrate wealth and make investing in the future a pointless exercise. Like every previous generation's preferred catastrophe, it is held with great intellectual conviction and used to justify paralysis. The fact that technology has repeatedly disrupted and then enlarged the economic pie does not seem to trouble the Doomers unduly.

Earlier this year, I wrote again about how bearish voices grow loudest precisely when markets are falling--the moment when the greatest damage is done by those who listen to them. What the longevity research adds to this investment argument is an unexpected dimension. It suggests that the psychological habits of pessimism — ruminating on threats, catastrophising outcomes and defaulting to worst-case interpretations — are not merely unhelpful to your portfolio. They may also be actively damaging your body. The investor who cannot sleep because of a market correction, who checks prices obsessively, who spirals into anxious predictions about economic collapse, is paying a cost that goes well beyond underperformance.

The optimist, by contrast, is not someone who ignores risk or pretends that markets only go up. Well-calibrated investor optimism is simply the belief that, over time, productive assets will create wealth, that human enterprise will adapt and grow and that temporary setbacks do not change the long-run direction of travel. That belief has been validated repeatedly across every market cycle on record.

As things stand, this outlook seems good for your returns. It may also, quite literally, be good for your life.

Also read: 

An act of optimism

The patience problem