There has been an evolution, of sorts, moving slowly through the financial services industry in the last several years. You've heard about this before, how there's a wave of interest in all things fiduciary. Investors are seeking more transparency around conflicts of interest, fees, and issues like that. But a large part of this is a reaction to just how complicated it is to invest these days. Tens of thousands of mutual funds, active versus passive, publicly-traded and private investments, annuities, alternative investments, the list goes on and on.
Doubt is not a pleasant condition, but certainty is an absurd one. —Voltaire
Uncertainty seems like one of those throw-away terms because it's so overused in the world of investing. The market either hates it or thrives on it, depending on one's perspective. It can be easy to gloss over the topic or ascribe market downturns to simple increases in uncertainty. But thinking long and hard about uncertainty, about risk and how we manage it, is critical to our success with investing, with business, and even our personal lives.
In a post from a few weeks ago I was discussing how important it is to know the code words some advisors use when they are selling their products and services. By understanding how these words are used you can get a pretty good sense of what the advisor's agenda is, the kinds of products they're selling, and the kinds of services you're likely to receive. The post stemmed from catching a financial radio broadcast while cruising through the central valley and scanning local radio stations.
What's probably the biggest risk retirees face? Is it the performance of the stock or bond markets? Is it inflation? Maybe spending too much or living too long? Or, how about the POTUS Twitter account? All kidding aside, the biggest risk isn't any of these, though each poses its own complications. As retirees look ahead and try to plan for a long, happy retirement, future long-term care (LTC) expenses are probably the biggest unknown factor and have the highest potential to derail an otherwise unsuspecting retirement plan.
This past weekend I spent much of my time building an aviary in our backyard. Not being much of a carpenter, the process was interesting and quite challenging. But between the whir of the drill and screech of the circular saw I thought a lot about the canaries we'll be housing, their sentinel work in coal mines, and questions from clients lately about market bubbles.
As my family and I are heading out today for our summer vacation, for some reason the theme song from 1950's/60's Have Gun – Will Travel keeps playing in my head. Except in my case the ballad of Paladin goes something like, "Have laptop - will travel, reads the card of a man", as I make sure to pack power cords and update software so I can keep in touch along the way. It doesn't have quite the same ring to it, but it works.
