November 28, 2013
Of all the holidays celebrated in the U.S., Thanksgiving is perhaps the most important; for who can argue with remembering and celebrating the blessings in our lives? Of course, this is a good daily practice. But especially on this day, usually shared with family and friends, it’s particularly appropriate to consider what is of most value?
Besides my dear family and friends, good health, and the many freedoms I enjoy, I count peace of mind as an important aspect of life for which I’ve worked hard and now enjoy.
Among the many blessings of my retirement this year have been communicating with hundreds of thousands of investors who read my weekly MarketWatch articles, written with my longtime friend and collaborator Rich Buck. I love hearing from them. In response to “The Ultimate Retirement Portfolio,” a reader posted this:
“Paul: As sound and as prudent advice as I’ve seen. Few investors have peace of mind. A strategy or, better yet, combination of strategies, that allows them to live with the ups and the downs is the first part of peace of mind. The second part is that it must be mechanical, with no opinions allowed to creep into the process.”
“If and when opinions enter, all of the benefits of the mechanical processes are gone, all decisions become purely guesswork, and the stress of having to guess eliminates that peace of mind. The cost is not just in dollars lost (as guesswork underperforms the mechanical system), but in the incalculable time lost to stress, sleep, and plain fun in doing something else much more enjoyable. I’ve been using mechanical systems – including market timing – for decades, and the total return is far better than anything else when you add it all up, and not just in dollar terms.”
My response: “Your comment made my day. You have said in a short paragraph what I have been trying to communicate for 30 years. The combination of reasonable return with real peace of mind is the ultimate retirement portfolio for most retirees. You and I have found that. My goal is to help others reach that financial and emotional result.”
And so it is with enormous gratitude that I thank you, my friends and readers, and wish you not only a “Happy Thanksgiving,” but peace of mind every day of your life.
Please continue to send your comments and questions, join me on social media, and share the many free resources available at my website.
To your success,
Conventional wisdom holds that regular rebalancing is a sound practice to control investing risk. But I’ve concluded that some of that conventional wisdom is wrong. More