What We're Reading and What We're Watching

Click on the links to find a variety of articles and videos that the Parr McKnight Wealth Management Group would like to share with you.

What We're Reading & What We're Watching

Check out 20 Life Lessons by Byron Wien.  Yes, we've all seen these lists before.  Byron Wien has spent the greater part of his 80 years in the investment world.  He’s one of my role models.   He’s smart, ethical, and not afraid to go against the crowd.  In “20 life Lessons,” he shares both investment wisdom and an awesome perspective on life.  

Ever have a tough stretch in life when it seems nothing is going right?  One of my favorite TED talks is  How the Worst Moments in Our Lives Make Us Who We Are by Andrew Solomon. As a writer, Andrew has put tremendous time and energy into telling the stories of hardships that others have experienced.  He says, “If you banish the dragons, you banish the heroes.”

Who wrote the perfect handbook on parenting?  NO ONE.  All we can do is gather kernels of wisdom by making mistakes, learning from others and READING.  I found a few nuggets in “Parental Zen: How to Keep Your Cool as a Parent.”  I’m certain you can find someone to pass this on to.  Pay it forward.  All parents learn on the job!

Welcome to a shaky start to 2014. There seems to be a slight unease developing with the investing public that the volatility in the market so far this year is the start of some sort of significant pullback or perhaps the bursting of the another stock market bubble. We don't know what the future holds but here's a couple observations:

  • The S&P 500 is up roughly 170% since the low of March 2009.
  • We have not had a routine 10% correction (that's fancy Wall Street language for a drop in stocks) in over 18 months.
  • With wisdom comes understanding, with understanding comes peace. We hope you get some from the articles and video below.
    1. Most of you have heard of Professor Jeremy Siegel from the Wharton School of Business - what does he think? Click here for a two minute video.
    2. Take a look at Correction Underway, an overview of the current investment environment by our Chief Strategist, Gary Thayer.
    3. This one is a little dated, but we think A Few Good Reasons to Hoard Some Cash Now, is well worth your time. Several of our strategies have a significant cash cushion to mitigate volatility and make purchases at lower prices.

Remember the four horseman of the investors apocalypse - Fear, greed, inflation and taxes, and keep history in mind. Declines vary in depth but have never been permanent.

 I heard the phrase, "who's going to take care of my dad," from a good friend whose 80 year old widowed father was beginning to slip mentally and facing his second hip replacement surgery. Everyone should have a plan to live with dignity. Hope is never a strategy, and yes, it can happen to you. We'd like to share three resources with you:

  1. An awesome TED Talk video: Prepare for a Good End of Life
  2. Wall Street Journal Article: The Cost of End-of-Life-Care
  3. Long Term Care Frequently Asked Questions from Wells Fargo Advisors

Please be aware that Long Term Care policy premiums have risen dramatically in the last few years, however there are many planning tools that can help clients offset healthcare costs in retirement that are not covered by Medicare.

Imagine Rip Winkle falling asleep in October of 2007 and waking up now. He'd wake up to an 8.4% increase in the Dow and a 6.5% increase in the S&P 500. Equities have been on the rise and First Trust's Still Bullish boasts that this trend will continue, estimating a year-end Dow of 16,250 and the S&P 500 at 1,765. What might things look like if you took another 5 year nap today? This suggests those long in equities just might wake up a little wealthier.

Have you noticed certain items costing more at the store than they used to? Michael Sivey's If There's No Inflation, Why Are Prices Up So Much?offers some insight on inflation versus a relative price change. Sustained inflation leads to workers demanding higher pay to compensate for their increased cost of living, but today, despite the rising costs of raw materials, wage increases are at a below-normal rate. Those being affected the most are middle-class American families.

As long term care costs continue to rise, types of services, bundles and add-ons also seem to be multiplying. For families feeling overwhelmed by the "mind-boggling array of options," The Cost of Living Longer offers some strategies that can either save you money or get you more bang for your buck. Topics include paying for care, choosing the right care and other options that are available to you.

Uncle Sam puts his foot down – The IRS will report to the Treasury Department their plan of action to collect from taxpayers who have made individual retirement account (IRA) mistakes. In past years, millions of IRA tax penalty dollars have gone uncollected for things like missed withdrawals and excess contributions. Read IRA Rules Get Trickier for a review and to learn why it is now more important than ever to get your accounts in order.

Harvard Business School professor Clay M. Christensen devised a set of guidelines for his life that he shared with a graduating class who asked him to address them on how to apply his principles and thinking to their personal lives. Teaching others how to think instead of what to think is the core of Christensen's beliefs. Read on to learn about his guidelines that are centered around being happy in your career and in your personal relationships. Be sure to pass his advice on to your kids.

You will learn what the best predictor of success is in this TED Talk. Angela Lee Ducksworth left an executive consulting career to teach seventh grade math. Working with students inspired her to eventually study intangible concepts and how they may predict success. While teaching, she saw that IQ was not the only difference between her best and worst performing students. Instead of just measuring IQ, we need to gain a better understanding of learning from a motivational and psychological perspective. So what was the one characteristic that stood out as a predictor of success? - Grit. Calvin Coolidge says it best: "Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated failures. Persistence and determination alone are omnipotent."

We have another TED video for you called Israel and Iran: A love story? It's a very moving story that all started with an Israeli graphic designer, Ronny Edry's poster being shared on Facebook. The poster featured the designer himself and his daughter boasting the message "Iranians...we love you." Watch the video to learn how this one Facebook post created a movement of peace.

We'd like to share with you another TED Talk by the late and great UCLA Basketball Coach John Wooden. Although Wooden passed away in June of 2010, his words live on and inspire others to pursue the best in themselves and how to define success in not only the game of basketball, but in the game of life. One phrase that stuck with Wooden throughout his years states that "No written word no spoken plea can teach our youth what they should be, nor all the books on all the shelves, it's what the teachers are themselves." Check out more of Wooden's wise words in his video The Difference Between Winning and Succeeding.

Many people say that two thirds of the volume on the New York Stock Exchange is attributed to computer programmed high frequency trading which is very short term and results in volatility. Co-founder and CTO of software company Quid, Sean Gourley, discusses how as humans, our brains have limitations on the speed at which they can process things. The high frequency financial ecosystem is something that should be regulated by a control system beyond the capabilities of human cognitive understanding. Watch Sean discuss the use of software and algorithmic agents as regulators in the TEDx video on High Frequency Trading and the New Algorithmic Ecosystem.

Check out this touching video of a tribute to Sinatra on the Stradivarius at Radio City Music Hall.