Search This Blog

Sunday, September 25, 2022

The Best Way to Abandon the Useless Myth That There is a Best Way

Why do we obsess with the "best" this and the "best" that, especially when it comes to other people, food, or music, or art or anything else that different people react to differently?  We go to great lengths to construct artificial situations- especially in sports -to make it easy to decide who or what is "best".  We have the Olympics gold, silver and bronze medals.  Only one person can get a gold medal in their sport.  We have the Super Bowl.  Only one team can win it.  In both cases, "the best" is obvious but only because of our narrow definition of it. 

We see recipes all over the place claiming to be the best.  Just before I began this blog a recipe for challah French toast popped up.  I really like French toast.  But I don't like challah.  It's too cake-like.  I prefer whole wheat or cracked wheat sour dough.  That makes the "best" French toast for my palette. 

And so on.  The best shoes, the best tools, the best movie; I don't get it.

But my purpose with this little blog wasn't to find the causes of this useless myth, it was to begin working on abandoning it.  You don't always have to understand a phenomenon to fix it.  Usually it is sufficient to just displace the myth with better ideas and/or practices.  So if our goal is to be happier, does having the best of everything and being the best at everything make you happier than everyone else?  Not in my experience.  So what does?

I think the happiest people don't let the best interfere with the good.  They know that no matter what comes their way they will make good out of it whether it is tragedy or opportunity.  They also define for themselves what constitutes tragedy or opportunity.  They don't give much weight to the "good for you's" or the "that must be terrible's" from others. Finally, they have confidence in themselves being able to find opportunities in the most difficult of circumstances, now and in the future.

When my daughter died, that seemed to be an insurmountable blow.  It was.  I did not think I would survive it.  I didn't want to survive it, at first.  And yet, I'm still here almost 30 years later.  In the meantime, literally because I had no choice, I find it important to be more kind and generous than in the past.  I constantly ponder how I spend the last 1000 of my lifetime 4000 weeks:  Doing nothing? Being productive?  Being with people?  Spending time alone?  All of the above?

Don't let the "best" (according to other people's standards) get in the way of living your good life.


Your Constructive Comments are Welcome!

Sunday, September 11, 2022

A "Balanced" Stock & Bond Portfolio Will Protect Me

Will a balanced 60/40% stock/bond portfolio smooth the investing roller coaster ride?  Well, it all depends on how many years you have to work with.  And I would say a minimum of a decade, maybe more.  Don't forget the S&P 500 index's 12 1/2 year zero return from 2000 to 2013.

So, the important question is, "protect me" from what?  

  • From retirement failure (running out of money)?  Not really.  
  • From market volatility (we've seen bonds tank right along with stocks)? Not at all.
  • From Sequence of Returns risk? (the bad luck of retiring just before a major correction).  Nope.

As my brilliant corporate IT friend Bill pointed out to me, "Which of these years [in the chart at the link below] is not like the others [so far]?"
This is why I, many academics such as Wade Pfau and an increasing (but still very disappointing) number of advisers are using indexed annuities as partial or total bond substitutes.  Not to mention the guaranteed lifetime income they offer- if selected -and long term care benefits of some contracts.

Sorry you have to click on the link.  I couldn't get the image to display correctly.


 https://mail.google.com/mail/u/0?ui=2&ik=9e24787411&attid=0.1&permmsgid=msg-f:1742966880347625917&th=183043249e6419bd&view=fimg&fur=ip&sz=s0-l75-ft&attbid=ANGjdJ9Fvq_YzJxYRjOlQSCadi7GRn0qtPh5xlnqZz2-5TT74_cBTeCNQRVK8BadPe_lb1pTYhxm91IVvBRfII48b9VyLgiPeeyEJGgToWNlm8C3E4-v0SuzxXndBM0&disp=emb

Gary

Your Constructive Comments are Welcome!