Stoic Philosophy Applied to Investing
The Stoics drew a hard line between what you control and what you don't. Applied to investing, that single idea quietly solves most of an investor's anxiety.
Don't have time? Here's what you need to know:
- 1Stoicism's dichotomy of control says focus on what you can influence — savings rate, costs, diversification, behavior — and accept what you can't.
- 2Most investing anxiety comes from getting this backwards: worrying about the uncontrollable market while neglecting the controllable fundamentals.
- 3Premeditatio malorum — rehearsing downturns in advance — means a ~10% correction yearly and occasional bear markets won't blindside you.
- 4Stoic investing isn't passivity; it's caring intensely about low costs and discipline, which is exactly what the long-run evidence rewards.
The Dichotomy of Control, Applied to Money
The core idea of Stoic philosophy is the dichotomy of control, set out by the former-slave philosopher Epictetus around two thousand years ago: some things are within our power and some are not, and serenity comes from focusing entirely on the former while calmly accepting the latter. It is a strikingly practical idea, and it maps onto investing almost perfectly.
The market's daily moves, the economy, interest rates, what your stocks do next week — none of these are within your control. Your savings rate, the costs you pay, how diversified you are, and how you behave during a downturn — these are entirely within your control. The Stoic investor pours energy into the second list and refuses to be ruled by the first. Most investing anxiety comes from getting this backwards: agonizing over the uncontrollable and neglecting the controllable.
Sorting What You Can and Can't Control
Making the dichotomy concrete is where it earns its keep. Almost everything that determines your long-term outcome sits in the 'controllable' column, and almost everything that dominates the financial headlines sits in the 'uncontrollable' one. Spending your attention in proportion to your control is the whole discipline.
| Within your control | Outside your control |
|---|---|
| Your savings rate | Market returns next year |
| The fees you pay (e.g. 0.03% vs 0.70%) | Interest rates and inflation |
| How diversified you are | Recessions and crashes |
| Your behavior in a downturn | What any single stock does |
| How often you check the market | Headlines and pundits |
Tip: When a market worry grips you, ask the Stoic question: 'Is this within my control?' If not, your only productive move is to return attention to your savings rate, costs, and plan.
Rehearsing the Downturn Before It Arrives
The Stoics practiced premeditatio malorum — the premeditation of adversity — deliberately imagining setbacks in advance so they would not be shocked when they came. For an investor, this is one of the most useful exercises available: before a crash, calmly accept that bear markets are a permanent feature of investing. The S&P 500 has historically suffered a roughly 10% correction about once a year on average and a 20%-plus bear market every handful of years, and it has recovered from every one of them so far.
An investor who has already rehearsed and accepted this is not blindsided when stocks fall 30%. They expected it; it is the price of admission for long-term returns, paid in advance in their mind. Marcus Aurelius, writing his Meditations as a Roman emperor, returned again to the same theme: do not be disturbed by what you cannot prevent, and do not let externals govern your inner state. A portfolio drop is the ultimate external.
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A Stoic Investing Practice You Can Keep
Turned into habits, Stoicism produces a remarkably sane investing approach. Focus relentlessly on the controllables: maximize your savings rate, drive costs toward the floor with funds like VOO or VTI at around 0.03%, diversify broadly, and pre-commit your behavior for the next downturn. Then practice indifference to the daily noise you cannot change, checking rarely and tuning out the pundits whose forecasts you already know are unreliable.
This is not detachment or not caring; it is caring intensely about the few things that matter and refusing to spend a single unit of worry on the rest. The Stoic investor is calm not because they are passive, but because they have correctly identified where their power lies. That is also, not coincidentally, the temperament that the long-run evidence rewards: low costs, broad diversification, and the discipline to do nothing during a panic.
Important: Stoic acceptance is not an excuse for inaction on the things you control. Accepting the market calmly while ignoring high fees or an undiversified portfolio misses the entire point.
Frequently Asked Questions
How does Stoicism apply to investing?
Through the dichotomy of control: focus only on what you can influence and calmly accept what you can't. You control your savings rate, costs, diversification, and behavior in a downturn; you don't control market returns, interest rates, or recessions. Most investing anxiety comes from getting this backwards — agonizing over the uncontrollable market while neglecting the controllable fundamentals that actually drive your outcome.
What is the dichotomy of control?
It's the central Stoic idea, from Epictetus, that some things are within our power and some are not, and peace of mind comes from focusing on the former while accepting the latter. For investors, it draws a clean line: your savings rate, fees, and behavior are yours to command; market moves and headlines are not. Spend your attention in proportion to your actual control.
How do Stoics stay calm during a market crash?
They practice premeditatio malorum — rehearsing adversity in advance. Before a crash, the Stoic investor has already accepted that bear markets are permanent features: the market has historically seen a ~10% correction roughly yearly and a 20%+ bear market every few years, recovering from all of them. Having pre-accepted the downturn, they aren't blindsided when it comes, and they don't let an external event govern their inner state.
Is Stoic investing the same as not caring?
No — it's the opposite. Stoicism means caring intensely about the few things you control (savings rate, costs, diversification, behavior) and refusing to spend worry on the rest. Calm comes from correctly locating your power, not from passivity. Accepting the market while ignoring high fees or an undiversified portfolio would miss the entire point of the philosophy.
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Alex Harrington
CFA Level II Candidate, Finance & Economics
Alex Harrington is an independent ETF researcher and personal finance writer with over 8 years of experience analyzing exchange-traded funds. A CFA Level II candidate with a background in economics, Alex has reviewed 800+ ETFs and helped thousands of beginners build their first investment portfolios through clear, jargon-free education.
This content is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.