Month: May 2021

Your Safety Net Is Not a Hammock

photo shows a safety net in midair

The advancement of technology has helped humans perform more tasks more safely.

Backup cameras and drift warning systems help curb preventable accidents in our vehicles. Even in our pastimes, technology can monitor more risks and dangers than ever. Big-wave surfers take on, well, bigger waves, prepared with more data about the conditions than ever before… not to mention a jet-ski nearby, ready to help anyone who crashes.

Such monitoring technology may allow us to take on more risk, but this doesn’t mean we ought to. Specifically, this tech becomes dangerous when we let it take over and do our thinking for us too.

Some providers offer tech tools to help “measure” risk tolerance. The tools are, in theory, designed to increase transparency. If we know more about the dangers present, shouldn’t we be able to make better decisions?

For some investors and clients, it’s perfectly comfortable to use such scores to determine the “appropriate” investments. The trouble is that then the tech tool is doing the interpreting, moving from observation to decision.

That middle part—the thinking, the choosing, the deliberation—that’s where we like to focus our energy in this shop.

Many tools may seem like safety nets, keeping us from ever falling too hard, but they should not replace the process.

You may remember The Flying Wallendas, a family that for generations has performed high-wire stunts (one of them crossed the Grand Canyon on live television a few years ago). The family avoids nets when they can.

Why?

The net may make you feel better about the risks involved, but it’s counterproductive—and dangerous—if it leads you to behave with less awareness, intention, and energy.

You must behave as if the risks are always present… And carry on, making the best decisions possible.

Clients, wondering about nets, risk, and more? Let’s chat: call or write anytime.


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Make Your Best Friends Better

photo shows two people helping each other climb a mountain slope with a blue sea in the background

We are tethered to those around us. It’s not just an economic thing. It’s not necessarily a karma thing. But the things that happen in our tightest circles have consequences—for everyone involved.

Studies have shown that “your chances of becoming happy, depressed or obese in the future, as well as the likelihood that you would give up smoking, were all strongly correlated with similar changes in your closest friend,” as reported in the new book Friends: Understanding the Power of Our Most Important Relationships.

And you thought your BFF was special before!

Those studies have found that, like a team of mountain climbers, our close friend group can create a virtuous cycle. As one ascends, everyone else follows. When any of you improves, you all do.

  • Point your friends to resources they might be able to use. Making connections is one of those habits that’s practically free to practice and could be invaluable to the other party. (As an aside, this is why we love being able to offer free guides on our website… Never know who may be able to use them!)
  • Connect your resources to your values, and recognize others when you notice them doing the same. When folks live in an aligned way—and are conscious of it—it creates a positive feedback loop. As an example, we’ve been working with a few clients recently who’ve helped challenge our thinking about some of our holdings and examining the big picture in fresh ways. We’re all better for the process.
  • Celebrate together, hang in there together. Okay, this has us thinking about you, our clients. We love cheering on your milestones, those moments where you realize you’ve got what you need to do something in your real life… and we’re here to navigate the rest with you. Ups and downs, highs and lows. Part of the joy we share in the good times is the community we forge in the not-so-good ones.

The takeaways seem pretty clear to us (and for our friends!). Want to reach new summits? Build and invest in a team that will help make that happen. We know it’s been a good approach in our shop.

Clients, write or call when you’re ready to talk about your next goals, challenges, or anything else.


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A Certain Set of Skills

photo shows a baseball sitting on a striped jersey

When designing a portfolio, one might think about it like a baseball team. Obviously we want to build a winning team, but we know it won’t likely be an undefeated team. The strength of the team is in the versatility of the lineup.

Each player brings a skillset. There’s the base-stealer, the defensive replacement, the slugger, the all-star… We’re thinking about how some of these spots play a role in portfolios.

  • The Veteran Player. This is an older company that pays a nice dividend. It provides value even if it doesn’t perform as well as the others.
  • The Utility Player. This is a durable company providing steady, unexciting performances.
  • The Streaky Player. This is a company that has stretches of greatness followed by mediocrity—but it’s bound to turn it around. The potential is there, and the broader patterns suggest patience.
  • The Slugger. This company can carry a portfolio some days, strike out other days. It’s getting after it.
  • The All-Star. This company is the face of the portfolio: everyone knows it for its all-around performance. It’s a big presence.

No portfolio can be made from just one type of player. A portfolio consisting of only all-stars would be too expensive (and we like a bargain). A team of streaky players would be good during the good times—and tough to watch when they’re all struggling in sync.

A balanced lineup is what we desire. No guarantees on any particular outcome, but we think there are plenty of strengths that come in handy. Clients, when you have questions, please write or call.


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