THE COINCIDENCES IN LIFE ARE AMAZING. I was a young economics student when the Soviet Union began to collapse, and it was fascinating. We had a visiting professor from Moscow teach a class on the economics of communism, which was one of the best classes I took in college. I was so fascinated that I accidently…
These are the steps to financial wellness. Like physical wellness, they are more of a journey than a destination. In both cases it is an ongoing process, and there will be ups and downs, forward progress and setbacks. When the setbacks happen, we must brush ourselves off and get back on course.
Diversification in investing is one of the most sacred yet most misunderstood concepts. To some degree this is on purpose. One should never forget that Wall Street is in the transaction business: The more transactions an investor makes, the better, and no concept has led to more transactions than diversification. Real diversification, however, is about carefully selecting investments that are truly different and will likely do well under different circumstances.
Patience is a virtue: I have been reminded of that lesson over the last year. We have been recovering from the 2022 bear market, and it has been a frustratingly slow process. Things started off looking better, yet it was only seven stocks that were going up while everything else went nowhere or even down. Then finally the wind came back around and we ended 2023 with a strong rally. I am happy to say that we were well-positioned for that rally and delivered very good results for our clients, but that is not the point of this lesson.
Yeast is a very small thing, but the difference it makes in bread is huge. In the institutional retirement plan world, there is very little difference between doing the right thing for plan participants and covering one’s behind – DTRT or CYA? The difference in action is no bigger than a single grain of yeast, but oh my what a difference it makes in outcomes.
