Healthy, Wealthy, and Wise #2

 

 

Health

One of the keys to long-term success is to avoid mistakes, unforced errors. 

This summary traces the efforts of David Sinclair of Harvard, to slow or reverse aging and other age-related realities. He says, "Aging can be slowed or reversed, and we are about to figure out how." 

According to a Wall Street Journal article, he has founded the following companies. None of them have gained traction.

• Animal Biosciences. Reversed aging in dogs.
• Calico Life Sciences. Launched by Google.
• New Limit. A cell re-programming company.
• Altos Labs. Cell rejuvenation.
• Sirtris Pharmaceuticals. Red wine and resveratrol.
• OvaScience. Helping "older" women become pregnant.
• CohBar. Treatments for obesity and fatty liver disease.
• Life Biosciences. Genetic reprogramming for vision loss.
• Metro International Biotech. Seeking to develop a formulation to treat age-related conditions such as Alzheimer’s disease. Being marketed to consumers as a longevity-promoting supplement.
• Fully Aligned. A consumer wellness company featuring Serena Poon, celebrity chef.
• Tally Health. Developing a cheek-swab test to tell people their biological age.

Sinclair admits that “Developing medicines that safely and effectively target aging is a difficult endeavor that has turned out to take longer than I expected.”

The Food and Drug Administration, where approval for longevity drugs is administered, doesn’t consider aging a disease.

The holy grail of longer lives continues to be elusive. Don't make an unforced error in its pursuit.

Wealth 

Here are two wildly diverse strategies for investing at the edges.

At the hard money edge is owning a core of U.S. Treasury securities. They pay reasonable rates and are fully guaranteed by the full faith and credit of the United States government. 

At the easy money edge is to own some kind of cryptocurrency like Bitcoin. Despite friendlier tones being expressed by the incoming administration, our view remains that cryptocurrencies don't meet the standards of an investment. No earnings, no cash flow, no dividends, no interest, no use case.They are a pure speculation.  

At the end of the day, the lure of "Easy Money" requires parting with your hard earned cash to earn even more. "Hard Money" takes years to build and doesn't depend on a gimmick, popularity, or single investment. We're sticking with Hard Money. You're welcome. 

💥IMPORTANT! This is not specific investment advice! If either of these possibilities appeal to you, please contact us before you do anything. There are important details that must be covered.

 

Wisdom

         Willem Arondéus, "December" (ca. 1929), Rijksmuseum

             The caption reads, "The Year Reclines to Rest in a Cloak of Cold."

In Nature, this is the season of darkness, rest, silence. Silent Night, Holy Night. Visions of sugar plums. This poem seems to strike the right notes.

Let the eyes sparkle with joy,
The mind be filled with possibility,
The heart strong with courage
And your only boundary is joy.

Go. Believe.

You can do anything. It is all possible.
Allow yourself to breath-in the openness of possibility.
Release all barriers of the mind.
Let the soul rise with love and passion.
Allow yourself to dream.
You're too precious to not.

Erica Valentine, Just Breathe

Blessings for this Holiday Season and Best Wishes for a Fulfilling New Year.

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.

 

 

 

 

 

What We're Thinking: Inspiration Struck

    

It was 2:56am this morning. I had just read some updated information on stroke prevention. Get good sleep was a part of it! The phrase, "healthy, wealthy, and wise" ran through my head. I texted the article to the family. 

Then I got to thinking about all the other people I know. People like you. Would they find commentary on health, wealth, and wisdom useful?

Then I realized that these Considerations have been focused on the wealth part. I thought we might make it better by including health and wisdom. So, starting here and now, each issue will include something on Health, Wealth, and Wisdom.

Let's roll.

Health

I mentioned the updated stroke prevention information. The emphasis is on regular screening for stroke risk factors like high blood pressure, high cholesterol, diabetes, and obesity. The guidelines also include lifestyle changes such as eating a nutritious diet, staying physically active, and getting healthy sleep.

If you're younger and the possibility of a stroke is not on your screen, it's still not too early to establish a healthy lifestyle. Small actions taken consistently over long periods of time can produce amazing results. It's like saving a little bit each payday. In 20 years you'll be astonished.

You can read the full article here.

Wealth

Goldman Sachs recently published a 37-page research piece suggesting that US stock market returns for the next 10 years are expected to be a paltry 3%. That's far below both recent and historical returns. They cite market concentration and high valuations as the main culprits.

Ben Carlson and Barry Ritholtz, both of Ritholtz Wealth Management, countered that 3% would imply a financial debacle of some kind. Like the stock market crash at the front end of the Great Depression, the stagflation of the 1970's, or the Great Financial Collapse (GFC) of 2007-08.

They contend (here and here) that while a financial debacle is always possible, the probability is low, and such a debacle is impossible to forecast ahead of time anyway.

We align with Ben and Barry on this.

Wisdom

Morgan Housel is one of our favorite up and coming writers. His two books, The Psychology of Money: Timeless lessons on wealth, greed, and happiness (2020), and Same as Ever: A guide to what never changes (2023), will have long and useful lives. He also publishes in a blog at the Collaborative Fund.

In a recent post, he wrote of a Russian proverb that goes, “The past is more unpredictable than the future.” 

It’s common for our memories of the past to become disconnected from how we actually felt at the time. Hence, there are "the good old days."

But we sanitize the past because we now know how the story ends. In retrospect, we think nothing was uncertain and there was nothing to worry about. In fact, our past selves had no idea how things would end up and we had a lot to worry about. Uncertainty dictates nearly everything in the current moment, but looking back we pretend it never existed.

The current moment that might feel risky and uncertain is often bursting with opportunity. The past isn't as good as you remember. The present isn’t as bad as you think. The future will be better than you anticipate.

Today happens to be election day. We'll begin remembering more of the past, assessing the present, and gauging the future. 

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There you are. Feedback is the breakfast of champions (wisdom). Let us know what you think. Is this a good direction for us to take? Or should we just stick to wealth? If you like, feel free to forward this to your family and friends. And as usual, if there's something you'd like to talk about, here's our contact information.

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.

 

What We're Thinking: Interest Rates Are Falling-- What Should You Do?

 

The worst bear (down) market ever, in fixed income (bonds), unfolded from August, 2020, to October, 2023. You lived through it. Maybe you didn't even know it happened. During that time, bond investments like what most of us own in our IRA's and 401k's, fell by about 24%. This gave rise to hand-wringing and worrisome chatter about the usefulness of the classic 60/40 portfolio, where bonds occupy the 40 part.

But like a bear market in stocks, the worse things get, the better the outlook becomes for patient, long-term investors like us. For the past year, bonds have risen by about 17%. Money market fund yields have risen from near zero to over 5%. What's not to like?

What's not to like is the probability that 5ish money market yields could shrink into the 4's over the next year. The chart below shows current expectations for the Fed Funds Rate. By the way, that's the only rate the Fed controls. All other rates, like for loans and other credits, are the result of global bond trading, most of which is done by computers.

Relax. This is nowhere near apocalyptic. Bonds in long-term portfolios should do just fine. The current yield of a bond is a good indicator for its future return. The current yield on widely-held bonds is around 4%. With inflation headed toward 3%, bonds are offering decent compensation.

So, let's net this out for most portfolios.

👉If you have a reserve, an emergency fund, or money earmarked to buy something within the next 3-5 years, holding it in a money market fund, CDs, or a short-term bond fund will be fine. Just expect the rates to gradually work lower.

👉If you have bond funds in retirement plans like an IRA, 401k, or in taxable accounts, chances are they are part of an intentional asset allocation strategy. There's no reason to abandon that. Stay the course.

Everyone's situation is a little different. Your life path is not like anyone else's. If you'd like to have a conversation about this, here's how to reach us:

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.