Some years back, while visiting Niagara Falls, my grandson told me, “Grandpa, if you were an animal, you’d be dead. Why is that? Because you don’t stay with the group.”
That’s a good example of a narrative. It’s a story that describes a situation or set of facts. Stories use facts in a way to convey a message.
Another example. Lions and gazelles all get moving at the crack of dawn. Those are facts. The story is that if the lions don’t get moving, they won’t get lunch. If the gazelles don’t get moving, they’ll be lunch.
Pretty straight-forward. A delightfully simple or complex story/narrative could be made for any age group about how lions get lunch and gazelles avoid being lunch.
So, what’s the point here?
As a country, we have a story, or narrative. Lately, it’s been negative. A pandemic. Firearms now cause more deaths among children than motor vehicle accidents (CDC). Only two in ten Americans say they trust the government in Washington (Pew Research). Political divisiveness is as extensive as it’s been for several decades (Pew Research). Among high-income nations, the U.S. ranks last on health care efficiency, equity, and outcomes (Commonwealth Fund). Social Security is on a count-down. Consumer confidence is matching levels seen only four other times in the past 50 years (Univ of Michigan). Religious freedom. Immigration. Gender and relationship issues. Take your pick. There’s a negative narrative all around.
The mainstream news outlets and thousands of “influencers” with social media megaphones make sure we hear that narrative. As Bill Gates says, “Bad news is a headline. Gradual improvement is not.”
Well, we have an alternative narrative. That narrative acknowledges that we’ve been here before. Right from its beginning, our history is packed with challenges, issues, debates, a Civil War, assassinations, riots, and so on. Yet, as the image at the top of the page shows, we are headed “up and to the right.” That’s our narrative. Up and To the Right. Pin it to your refrigerator.
But notice that the image has a wrinkle in it. Up and to the right is not a continuous straight line of rainbows, lollipops, and unicorns. There are wrinkles and backsliding. We’re living in a wrinkle moment. And here’s the good news: Every prior wrinkle moment has resolved to a better set of conditions. Progress happens.
In 1900, airplanes didn’t exist. Now, commercial air transportation is the safest way to get from Point A to Point B. Safer than your car.
In 1900, the most common causes of death were pneumonia, tuberculosis, and diarrhea. Forty percent of those deaths were of children under age 5. Now, we have new leading causes of death: heart disease, cancer, and COVID. These will be overcome in time.
In 1900, a person’s life expectancy at birth was 47. In my birth year, it was 67. In 2023, even with a recent decline, life expectancy at birth is 76. We are living longer in spite of healthcare system flaws.
What this means to your financial plan.
Like cockroaches, negative narratives can find their way into financial plans. That’s unfortunate, yet preventable. The facts are that every prior period of economic and financial difficulty has become the platform for an advance to new all-time highs. Without exception. Look it up. The losing bet has been to bet against humanity.
Yet, like the image shows, there are wrinkles. Advances are messy. We work through and learn from them. That’s why we keep financial dry powder in the form of cash reserves, emergency funds, savings accounts, CDs, bond funds, and so on. They provide confidence in the return of our money rather than the return on our money.
Since the long-run is up and to the right, the best place for “up and to the right” money is in a broadly diversified mix of low-cost, index-based, global investments. Simply put, just keep buying. Or, if you're of a certain age, just keep holding. This can be accomplished with a surprisingly small number of individual investments. Let’s have that conversation.
—Thomas Babington Macaulay
That’s a good example of a narrative. It’s a story that describes a situation or set of facts. Stories use facts in a way to convey a message.
Another example. Lions and gazelles all get moving at the crack of dawn. Those are facts. The story is that if the lions don’t get moving, they won’t get lunch. If the gazelles don’t get moving, they’ll be lunch.
Pretty straight-forward. A delightfully simple or complex story/narrative could be made for any age group about how lions get lunch and gazelles avoid being lunch.
So, what’s the point here?
As a country, we have a story, or narrative. Lately, it’s been negative. A pandemic. Firearms now cause more deaths among children than motor vehicle accidents (CDC). Only two in ten Americans say they trust the government in Washington (Pew Research). Political divisiveness is as extensive as it’s been for several decades (Pew Research). Among high-income nations, the U.S. ranks last on health care efficiency, equity, and outcomes (Commonwealth Fund). Social Security is on a count-down. Consumer confidence is matching levels seen only four other times in the past 50 years (Univ of Michigan). Religious freedom. Immigration. Gender and relationship issues. Take your pick. There’s a negative narrative all around.
The mainstream news outlets and thousands of “influencers” with social media megaphones make sure we hear that narrative. As Bill Gates says, “Bad news is a headline. Gradual improvement is not.”
Well, we have an alternative narrative. That narrative acknowledges that we’ve been here before. Right from its beginning, our history is packed with challenges, issues, debates, a Civil War, assassinations, riots, and so on. Yet, as the image at the top of the page shows, we are headed “up and to the right.” That’s our narrative. Up and To the Right. Pin it to your refrigerator.
But notice that the image has a wrinkle in it. Up and to the right is not a continuous straight line of rainbows, lollipops, and unicorns. There are wrinkles and backsliding. We’re living in a wrinkle moment. And here’s the good news: Every prior wrinkle moment has resolved to a better set of conditions. Progress happens.
In 1900, airplanes didn’t exist. Now, commercial air transportation is the safest way to get from Point A to Point B. Safer than your car.
In 1900, the most common causes of death were pneumonia, tuberculosis, and diarrhea. Forty percent of those deaths were of children under age 5. Now, we have new leading causes of death: heart disease, cancer, and COVID. These will be overcome in time.
In 1900, a person’s life expectancy at birth was 47. In my birth year, it was 67. In 2023, even with a recent decline, life expectancy at birth is 76. We are living longer in spite of healthcare system flaws.
What this means to your financial plan.
Like cockroaches, negative narratives can find their way into financial plans. That’s unfortunate, yet preventable. The facts are that every prior period of economic and financial difficulty has become the platform for an advance to new all-time highs. Without exception. Look it up. The losing bet has been to bet against humanity.
Yet, like the image shows, there are wrinkles. Advances are messy. We work through and learn from them. That’s why we keep financial dry powder in the form of cash reserves, emergency funds, savings accounts, CDs, bond funds, and so on. They provide confidence in the return of our money rather than the return on our money.
Since the long-run is up and to the right, the best place for “up and to the right” money is in a broadly diversified mix of low-cost, index-based, global investments. Simply put, just keep buying. Or, if you're of a certain age, just keep holding. This can be accomplished with a surprisingly small number of individual investments. Let’s have that conversation.
“On what principle is it, that when we see nothing but improvement behind us,
we are to expect nothing but deterioration before us?”
—Thomas Babington Macaulay
James Cosgrove,
CFP, Plano, TX jim.cosgrove@verizon.net 972-489-0262
Jim Cosgrove, Partner, San Jose, CA jimcos42@gmail.com 408-674-6315
Evidence-based. Rules-driven. Policy-focused.
Addition on July 11, 2023: The New 1970's
https://www.noahpinion.blog/p/the-new-1970s
