Conviction and Detachment: The Twin Engines of Professional Investing
Originally published on IREI.com
by Ryan Swehla and Joe Muratore
PHOTO: Unsplash
The paradox we live every day
For professional investment managers, every decision lives at the intersection of two competing disciplines: conviction and detachment. Both are essential, yet they pull in opposite directions. Conviction drives us to act boldly: to seize opportunity, to lead capital toward the future we believe in. Detachment demands calm: to test assumptions, accept uncertainty, and walk away when the facts no longer fit.
This tension defines institutional investing. And for the pension trustees, consultants, and staff who oversee managers, understanding how we navigate that balance offers a window into what truly separates a good investment process from a great one.
Conviction: the work of belief
At its core, investing is an act of belief informed by evidence. Conviction isn’t arrogance; it’s the disciplined confidence that grows out of data, due diligence and repetition.
Managers build conviction by mapping markets, analyzing cash flows, pressure testing assumptions, and debating scenarios until a clear view emerges. In today’s data-rich environment, conviction means more than “having a gut feel.” It’s about translating complexity into clarity and having the courage to stand behind that clarity when markets waver.
Conviction is what allows a manager to buy when fear is high, to stay the course when volatility tests nerves, and to advocate for a strategy that may be unpopular in the moment but right over the long arc. Without conviction, portfolios drift and opportunity erodes.
Detachment: the discipline of letting go
Yet conviction alone is dangerous. Left unchecked, it hardens into stubbornness. Detachment is the safeguard. It’s the ability to separate ego from evidence, to admit when an investment no longer fits, even after months of effort.
For managers, detachment shows up in process design. It’s the reason we submit every deal to peer review, use standardized underwriting models and require investment committee approval. Those structures exist not to slow us down but to create breathing space between enthusiasm and execution.
True detachment isn’t apathy; it’s professional objectivity. It allows us to acknowledge that no matter how elegant the thesis, reality has the final say.
Balancing the two in practice
The best managers cultivate an environment where conviction and detachment coexist. That balance often starts long before a deal closes.
Our own discipline relies on what we call a reverse funnel: casting a wide net of offers, conversations and early-stage opportunities. Most of these will never close, and that’s the point. By maintaining a large field of potential investments, we prevent emotional attachment to any single one. Detachment is baked into the system.
But when data and judgment converge – when pricing, fundamentals, and strategy align – we act decisively. Conviction, at that moment, isn’t a leap of faith; it’s the outcome of hundreds of small acts of discipline that filtered out weaker options.
This process is uncomfortable by design. It feels awkward to make an offer at a price well below expectations or to decline a deal that once looked promising. Yet that discomfort signals health. It means the system is functioning as intended, not chasing validation.
The role of data: from emotion to evidence
In the past, conviction often came from intuition, a seasoned sense of the market. Today, it’s increasingly rooted in data. The evolution from “feel” to “evidence” doesn’t erase judgment; it refines it.
Data empowers detachment by making decisions reproducible and transparent. When a model, not a mood, drives outcomes, disagreements become analytical rather than personal. At the same time, data deepens conviction by showing exactly why a position deserves confidence.
Of course, even the best models rely on assumptions, and assumptions contain bias. The art lies in knowing where data ends and belief begins, and revisiting that line often. Technology can expand our field of vision, but it cannot replace the humility that detachment demands.
Investment committees: structured detachment
For institutional managers, the investment committee is where conviction meets its first real test. The presenting team has lived and breathed a deal for months; the committee enters with fresh eyes. That distance is its value.
A well-functioning committee doesn’t extinguish conviction; it refines it. Its questions force the team to articulate what’s fact, what’s assumption, and what’s aspiration. It provides the check that ensures enthusiasm never outpaces prudence.
This dynamic can be tense. The team closest to the deal often feels protective; the committee, detached by design, must decide without that attachment. The healthiest cultures view this not as conflict but as collaboration – conviction shaped by detachment until both align.
Operating with intentional detachment
In a competitive marketplace, detachment can feel counter-cultural. Brokers create auctions; markets reward urgency. The temptation is to chase. Experienced managers resist by engineering systems that reward patience: maintaining pipelines, nurturing relationships and letting deals come to them.
The result is what might look like calm from the outside but is in fact relentless discipline. Every “no” preserves capacity for a better “yes.” Every declined deal is capital kept ready for opportunity. Detachment, in this sense, becomes an offensive strategy and an enabler of future conviction.
Discomfort as a feature, not a bug
Professional investors live with a certain amount of discomfort. It’s part of the job. Writing offers that may never close, walking away from a nearly perfect deal, waiting months for a seller to reconsider. These are not signs of indecision but of integrity to process.
Detachment means accepting that many efforts will bear fruit only later, if ever. Conviction means continuing to act anyway. Together they form a rhythm of patience and precision that defines durable performance.
Takeaways for fiduciaries
For institutional investors evaluating managers, understanding this balance can clarify what to look for:
Seek evidence of process, not just performance. Strong results matter, but they should emerge from repeatable systems that blend conviction and discipline.
Look for comfort with discomfort. A manager who never passes on deals or never challenges consensus may lack detachment.
Ask how data informs belief. The best managers can trace every conviction back to both evidence and humility.
Value governance that encourages dissent. Investment committees and peer reviews aren’t bureaucracy; they’re guardrails for long-term success.
Managers who embody both conviction and detachment tend to navigate volatility better, preserve capital during uncertainty, and capture value when markets misprice risk.
Conclusion: the maturity of balance
Conviction without detachment becomes hubris. Detachment without conviction becomes paralysis. The enduring craft of professional investing lies in holding both: acting boldly, yet always with the awareness that markets owe us nothing.
For investment managers, that discipline isn’t just philosophical; it’s practical. It shapes deal flow, governance, and communication. And for the pension trustees and consultants who partner with us, recognizing this balance offers assurance that capital is being managed not only with intelligence, but with humility.
In a world that rewards speed and certainty, the real edge remains timeless: the courage to believe, and the wisdom to let go.
Ryan Swehla, president, and Joe Muratore, CEO, are co-founders of Graceada Partners, a vertically integrated real estate firm that invests in workforce housing and industrial parks in secondary and tertiary markets in the West. This article is based on a recent episode of their Durable Value podcast.