Timeless Investing Lessons

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“It is near impossible to consistently outperform the market, which supports passive investing in lieu of active management strategies.” ~ Burton G. Malkiel

  1. Buy and hold investments for the long-term. Investment expenses and taxes will eat away at your returns. It’s impossible to perfectly time the market. You will make mistakes. Buying total market index fund will include buying nonprofitable companis in the mix. And, historical analysis shows:
    • When markets are high is when most people put money into the market.
    • When markets are low is when most people take money out of the market.
  2. Timing the market doesn’t work. Timing the market means selling assets at the top of the market and buying the asset at the bottom of the market. Successfully trying to time the stock market has never earned. Thus, you should not try to time the market.
  3. Dollar cost averaging. DCA means putting money into the market regularly overtime.
  4. Broad Diversification. You do not want all your personal capital and savings invested in a single stock or a single asset class, such as stocks only. You should diversify your investment across different asset classes (stocks and bonds), industries and countries. You want to own both domestic and foreign stocks, bonds, real estate and some cash.
  5. Cost matters. The two variable costs you can control are investment costs and taxes. Jack Bogle said, “you get what you don’t pay for.” Since, the lower the expense ratio the investor pays the purveyor of investment services, the more capital that is left over for the investor. Look carefully at the expense ratio.
  6. Index funds. Buy a total market index fund with zero or low expenses. Two-thirds of active investment managers are beaten by stock index funds annually. Ninety percent of active investment managers are beaten by stock index funds over a ten year period.
  7. Buy bond substitutes instead of total bond index fund such as preferred stocks or high yielding dividend paying established companies.
  8. Rebalance annually or at least bi-annually. This requires you to sale highly appreciated assets to buy assets that have not appreciated greatly or are on sale.

These are just a few timeless investing lessons that invest can follow to build wealth

References:

  1. https://www.wallstreetprep.com/knowledge/random-walk-theory/

COVID-19 Rapid Antigen Tests: One negative test result inadequate

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“If there is concern you’re infected, and you want to make sure you’re not infected, one or two [home rapid antigen] tests is not enough. Do three tests to make sure you’re not infected.” ~ Dr. Apurv Soni, assistant professor of medicine at Chan

Performance of Rapid Antigen Tests for COVID-19 varies over the course of an infection. Anyone who gets a negative result for COVID-19 from an at-home rapid antigen test shouldn’t assume they’re not infected, and should keep testing, according to a safety recommendation from the U.S. Food and Drug Administration.

The guidance is based on research conducted by University of Massachusetts Chan Medical School and partners supported by the National Institutes of Health. The study included more than 5,000 people nationwide over age 2.

The study finds that if repeat testing isn’t done, an infection may be present and you could unknowingly spread COVID-19 to others, especially if you’re not experiencing symptoms.

Repeat testing, at least two, is recommended after a negative test for those who show COVID-19 symptoms and for those who are asymptomatic, but may have been exposed to the virus, at least three test are recommended.

For participants who do not have symptoms (asymptomatic), the study found that two additional tests – the first taken 48 hours after the negative result and the second 48 hours later – are more likely to detect COVID-19 during the first week of infection.

For those who were symptomatic, one additional test taken 48 hours after a negative test, the rate of detection was more than 90% when testing started within the first week of infection.

Among the asymptomatic that had an infection lasting at least two days based on PCR testing, repeat testing three times at 48-hour intervals, the rate of detection was 79% when testing started within the first week of infection.

What this means is to optimize detection of COVID-19 infection with home antigen tests, people should test twice at least 48-hours apart if they are symptomatic and three times at 48-hour intervals if they were asymptomatic.

“On a personal level, this study speaks to when antigen tests are useful and not useful, and how to use them,” said Dr. Apurv Soni, assistant professor of medicine at Chan and the study’s lead investigator.

Wear a face mask

Anyone suspected of contracting COVID-19 without showing symptoms should exercise caution by wearing a face mask and stay away from crowds, the study said.

They should continue that practice for at least six days until three at-home antigen tests taken 48 hours apart have been completed.

“If there is concern you’re infected, and you want to make sure you’re not infected, one or two tests is not enough,” said Dr. Soni. “Do three tests to make sure you’re not infected.”

References:

  1. Henry Schwan, At-home COVID tests: One negative result not enough, study says, Worcester Telegram & Gazette, August 12, 2022. https://news.yahoo.com/home-covid-tests-one-negative-161544916.html
  2. https://www.medrxiv.org/content/10.1101/2022.08.05.22278466v1

Quote of the Day

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“A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.” ~ Burton G. Malkiel, Professor of Economics, Emeritus, Princeton University

Two Wolves

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An old Cherokee is teaching his grandson about life. “A fight is going on inside me,” he said to the boy.

“It is a terrible fight and it is between two wolves.

  • One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.” He continued,
  • “The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith.

The same fight is going on inside you – and inside every other person, too.”

The grandson thought about it for a minute and then asked his grandfather, “Which wolf will win?”

The old Cherokee simply replied, “The one you feed.”

Feeding yourself with or focusing on negative thoughts can bring out the worst in yourself.

Conversely, positive thinking fuels the goodness within us. We exude joy, peace, hope, kindness, and love.

Essentially, what you focus your mind and thoughts on grows.

References:

  1. https://www.virtuesforlife.com/two-wolves/

Too Much Free Money in the Economy

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“The way to think about it is there’s not going to be a lot of relief on inflation because if we pump another $600 billion free cash, which is basically what ‘The Inflation Reduction Act’ is, into the market after putting $6 trillion of free money in — there’s a reason we have inflation. We just print too much money.”  Kevin O’Leary, Shark Tank

Key Points:

  • Federal government is printing too much free money
  • Supply chain is still broken
  • Perpetual Inflation – Inflation will continue around 6% to 8% due to increased demand and loss of purchasing power.

Adding more money to an already inflated economy won’t bode well for Americans and their families, O’Leary argued.  The Inflation Reduction Act won’t help the U.S. with its ongoing labor shortage, as the labor force participation rate sits at 62.2%, a slight tick downward from the prior month. There are nearly twice as many job openings in the U.S. as there are unemployed people. “Part of that is a result of just giving free money to everybody all of the time and saying, ‘Look, stay at home. Stay on your sofa,'” O’Leary said.

Reference:

  1. https://www.aol.com/finance/kevin-o-leary-inflation-just-140233627.html

Gratitude and Overcoming Limiting Beliefs

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Gratitude enables you to overcome your limiting beliefs.

Limiting thoughts and beliefs are false thoughts and beliefs that prevent you from pursuing your goals and desires. They can affect every aspect of your life from your wealth, health, relationships and emotional well-being. For example, if you believe you don’t deserve to be happy, you may never pursue your dreams or goals, and you will not be happy.
Gratitude in all things

Gratitude enables you to overcome and replace you limiting thoughts and beliefs with positive and abundant thoughts and beliefs. Further, your attitude, mood, behavior and thoughts improve when you practice gratitude.

The three keys to gratitude include :

  • Emote – to feel emotionally grateful
  • Extend – reach out and connect socially
  • Exercise – practice until it’s instilled

Be grateful in all circumstances, no matter what, both in good times and dark times. Although, it is easier to be thankful during good times than during hard times. The trials and sufferings in your life are there to strengthen you. They’re there for you to learn and grow.

Dr. Robert Emmons, known as the “world’s leading scientific expert on gratitude”, andis a psychology profession from the University of California, Davis and also the founding editor-in-chief of the Journal of Positive Psychology, found that being more grateful can lead to increased levels of well-being and that being grateful towards a higher power may lead to increased physical health. Giving thanks to those you are in a relationship with (not only your family) will strengthen the relationship.

Studies found that persons practicing gratitude showed more optimism in life, reduced stress, depression, and anxiety levels. It is a continuous loop.  The more you experience gratitude and say ‘thank you’  the more you will find in life to appreciate. When you choose gratitude over happiness even your self-control is stronger.

Research found that patients with heart failure showed reduced symptoms of heart failure and inflammation, improved sleep, and moods through keeping a gratitude journal.

Daily gratitude exercise

  • Reflect on three things your grateful for
  • Feel the gratitude in your body and
  • Extend the gratitude to others

When you practice gratitude, you change your thoughts and beliefs about yourself. You are happier and experience greater joy in life. And, when you change yourself, you change your perception of the world.

Be thankful for everything that God has given you. Apostle Paul declared, “I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want” (Philippians 4:12, NIV).

An attitude of gratitude and a spirit of thankfulness make all the difference. Thus, to change your life and your world, change your attitude and in all things, practice gratitude.

References;

  1. https://www.virtuesforlife.com/33-gratitude-affirmations-to-transform-limiting-beliefs/
  2. https://billygraham.org/story/how-to-be-thankful-in-all-things/
  3. https://lovegodgreatly.com/be-thankful-in-all-things/
  4. http://www.thelife.digital/tl/articles/gratitude-is-the-best-attitude/

“I am grateful to feel stronger, wiser and more confident with each new day.”

Feeling Good and Well-Being

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Feeling good means that your body and mind are working at their peak level, and you have a general sense of well-being.

To feel good day after day, according to David Rakel, MD, director of the integrative medicine program at the University of Wisconsin, means that your body and mind are working at their peak level, and you have a general sense of physical, mental and emotional well-being. Dr. Rakel suggests:

Practicing Mindfulness: Stay focused on the present moment.

When you stop, look around and be mindful of the present moment, this life is pretty amazing.

“If we can learn to recognize the clutter that our mind is in and learn to be more mindful of the present moment, that can be a tremendous asset to our overall sense of well-being,” Rakel says. The “clutter” that can make you feel bad includes regret about the past and worry that bad things might happen to you.

A practice called mindfulness can help you reduce the clutter by keeping your focus on the present moment.

Mindfulness is the basic human ability to be fully present, aware of where we are and what we’re doing, and not overly reactive or overwhelmed by what’s going on around us.

To be more mindful, try to:

  • Take in the colors, sounds, and smells that surround you at any given time.
  • Pay attention to your breath moving in and out of your body for a few moments.
  • Let worrisome thoughts flow out of your mind when they pop up, rather than giving them attention and dwelling on them.

Whenever you bring awareness to what you’re directly experiencing via your senses, or to your state of mind via your thoughts and emotions, you’re being mindful. And there’s growing research showing that when you train your brain to be mindful, you’re actually remodeling the physical structure of your brain.

Essentially, mindfulness lights up parts of our brains that aren’t normally activated when we’re mindlessly running on autopilot.

“Mindfulness is awareness that arises through paying attention, on purpose, in the present moment, non-judgementally,” says Jon Kabat-Zinn, creator of the research-backed stress-reduction program Mindfulness-Based Stress Reduction (MBSR).

Practice staying positive.

The definition of being positive is having hope and confidence in one’s ability to handle what’s tough, along with remembering that nothing is all negative all the time, states Angela L., editor for A-Lifestyle.com.

Shifting perspective can help you live a happier, more fulfilling life.

Being positive starts with changing your perspective on how you see things. The same event can happen to two people, and one views it as a positive and one views it as a negative. So try to see the good side of the things and people around you; it can help you stay free of anxiety and depression, Rakel says.

Research says that we have powerful capabilities to choose positive ways and emotions of thinking. Our emotions change our body at the cellular level. Rather than trying to get rid of negative feelings, we can choose to respond to them differently. To live a happier life, it’s essential to learn how to highlight the positive thinking and improve your outlook on life.

If you believe something is negative, then it probably will be (and vice versa). Challenge that negativity by embracing the mindset of a fixer and a doer. If there’s a will, there’s a way! That’s truly how to stay positive.

You can’t control what happens to you, but one things you can control are your perspective and how you respond. It’s up to you to look for the right side in everything and react most positively.

Make a spiritual .

As long as your happiness depends on things that are impermanent, such as new luxury vehicles or new homes, you will always be disappointed and unhappy over the long-term.

If you want to achieve long-lasting peace and serenity, then your spiritual practice must become a way of life.

Rakel defines this spiritual practice as spending time on “that which gives your life meaning and purpose.”This could be your spiritual beliefs, enjoying nature, or sharing moments with loved ones. “If we get up in the morning excited about something that gives us meaning and self-purpose, our bodies do all they can to heal,” Rakel says.

In short, your happiness must depend on something that is constant and consistent. One thing in your lives that is constant is the present moment, and this is at the core of spiritual practice.

Be around people.

Having good interpersonal relationships and a good support network of family, friends, coworkers, and other people who care about you can help you stay healthier, feel less stressed, and even live a longer life. Spend time with these people regularly, and work to keep your relationships with them strong.

References:

  1. https://www.webmd.com/balance/features/more-energy
  2. https://www.mindful.org/meditation/mindfulness-getting-started/
  3. https://thriveglobal.com/stories/12-simple-ways-to-stay-positive-and-happy/

CBD at a Glance

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CBD is short for cannabidiol (pronounced kan-a-bih-die-ole).

CBD is one of hundreds of chemical compounds found in cannabis plants. One large group of these compounds is known as cannabinoids. Scientists have identified more than 100 cannabinoids, including CBD.

Besides CBD, another compound found in cannabis is THC, short for tetrahydrocannabinol. THC is “pscychoactive,” meaning it produces a high, a feeling of euphoria. CBD does not have this property.

There is a lot of confusion and misinformation floating around on the internet about CBD, and cannabis in general. People observe claims on the internet that cannabis and cannabinoids being cure-alls for everything from Alzheimer’s to warts,

Studies and anecdotal experience suggest a variety of possible health benefits from cannabinoids such as CBD and THC—for example, easing chronic pain and anxiety—but researchers are still learning exactly which compound produces which effects, and what the risks are.

But, it’s important to point out that it might not even be CBD that’s responsible for therapeutic effects, writes Dr. Mallory Loflin, a research scientist with VA and assistant professor of psychiatry at the University of California, San Diego. It could very well be one of its metabolites [substances that are created when a compound is broken down in the body]. It’s also very likely that a lot of those other compounds in the cannabis plant have therapeutic benefit. However, it’s equally likely that a lot of them also interact with and suppress the effects of CBD, as well. The problem is that most of those other compounds have not been categorized in a systematic way, and there is very little known about their bioavailability, metabolism, actions, and effects.

The terms hemp and marijuana are associated with CBD, and there is much confusion as to their precise definitions. What’s important to know is that varieties of the cannabis plant that would be considered marijuana contain far more THC than do varieties that are grown as hemp. According to the 2018 Farm Bill, hemp that is grown legally in the U.S. can contain no more than 0.3 percent of THC.

CBD products can be derived from either “marijuana” or “hemp” varieties of cannabis—or they can be made synthetically in a lab. CBD can be used in various forms, such as oils, sprays, creams, gummies, and capsules.

Although CBD does not produce a high, until recently it was considered a Schedule 1 drug—in all its forms—and was subject to tight regulation. The 2018 Farm Bill loosened restrictions on CBD derived directly from hemp, as part of the bill’s legalizing of commercial production of hemp.

Currently, there are no hemp-derived CBD products that meet FDA criteria for research. The synthetic version being used in the VA trial and other forms of CBD being used in research are still classified as Schedule 1 drugs. As such, approvals for the research must be obtained from several agencies, including the Drug Enforcement Administration and the FDA.

References:

  1. https://www.research.va.gov/currents/0219-San-Diego-VA-study-testing-cannabidiol.cfm

Mindfulness

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Mindfulness is the basic human ability to be fully present, aware of where we are and what we’re doing, and not overly reactive or overwhelmed by what’s going on around us.

Mindfulness is about fully attending to what’s happening, to what you’re doing, to the space you’re moving through. It is the basic human ability to be fully present, aware of where we are and what we’re doing, and not overly reactive or overwhelmed by what’s going on around us.

The annoying fact that we so often veer from the matter at hand.

Our mind takes flight, we lose touch with our body, and pretty soon we’re engrossed in obsessive thoughts about something that just happened or fretting about the future. And that makes us anxious.

The practice of Mindfulness can help you overcome anxiety, worry and many of the stresses of life.

Mindfulness can be cultivated through proven techniques. Here are some examples:

  1. Seated, walking, standing, and moving meditation (it’s also possible lying down but often leads to sleep);
  2. Short pauses we insert into everyday life;
  3. Merging meditation practice with other activities, such as yoga or sports.

When we’re mindful, we reduce stress, enhance performance, gain insight and awareness through observing our own mind, and increase our attention to others’ well-being.

8 Facts About Mindfulness:

  1. Mindfulness is not obscure or exotic. It’s familiar to us because it’s what we already do, how we already are. It takes many shapes and goes by many names.
  2. Mindfulness is a thing we already have. We have the capacity to be present and we can cultivate these innate qualities with simple practices that are scientifically demonstrated to benefit ourselves and our love ones.
  3. You don’t need to change. Mindfulness recognizes and cultivates the best of who we are as human beings.
  4. Mindfulness has the potential to become a transformative social phenomenon. Here’s why:
  5. Anyone can do it. Mindfulness practice cultivates universal human qualities and does not require anyone to change their beliefs. Everyone can benefit and it’s easy to learn.
  6. It’s a way of living.  Mindfulness is more than just a practice. It brings awareness and caring into everything we do—and it cuts down needless stress. Even a little makes our lives better.
  7. It’s evidence-based. We don’t have to take mindfulness on faith. Both science and experience demonstrate its positive benefits for our health, happiness, work, and relationships.
  8. It sparks innovation. As we deal with our world’s increasing complexity and uncertainty, mindfulness can lead us to effective, resilient, low-cost responses to seemingly intransigent problems.

When we practice mindfulness, we’re practicing the art of creating space for ourselves—space to think, space to breathe, space between ourselves and our reactions.

References:

  1. https://www.mindful.org/how-to-practice-mindfulness/
  2. https://www.mindful.org/what-is-mindfulness/

Measuring Inflation

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The consumer-price index reached 9.1%, its fastest pace in nearly 41 years, as strong consumer demand collides with supply shortages. ~ Wall Street Journal

U.S. inflation accelerated to a 9.1% annual rate in June, its fastest pace in nearly 41 years. Consumers are seeing prices rise sharply for a variety of goods and services as strong demand collides with persistent supply shortages.

Inflation is one of the most vexing issues facing economists and government policy makers, and is a factor raising the risk of U.S. recession.

The current bout of inflation has several causes, many linked to the pandemic. For one, consumers have been flush with savings from government stimulus programs, leading them to open the spigot for goods that are in scarce supply.

Supply-chain disruptions have also persisted across the global economy, with Russia’s invasion of Ukraine and Covid-19 cases in China adding additional pressures. Energy prices have gone up sharply.

Fewer workers are in the labor market, encouraging those who are working to demand raises. And low interest rates from the Federal Reserve have made borrowing cheaper, making big purchases more attractive. The Fed is now moving rapidly to make borrowing more expensive, using the central bank’s primary tool of raising rates.

Inflation reflects the broad rise of prices or the fall in the value of money. It generally results from too much demand chasing too few goods or limited services, leading to broad price increases.

To measure inflation, Labor Department’s consumer-price index, or CPI, has become the established benchmark. It is calculated using a survey of households and only covers spending on goods and services. It excludes expenditures that aren’t paid for directly, such as medical care paid for by a person’s health insurance. Its limited set of expenditures can make CPI more volatile. 

The personal-consumption-expenditures price index, or PCE, takes into account a broader range of expenditures—and feedback from businesses—to provide a more expansive picture of price changes. This inflation reading is the Federal Reserve’s preferred measurement. The Commerce Department releases its PCE estimate monthly as part of its income and spending report. 

Ref:

  1. https://www.wsj.com/articles/inflation-definition-cause-what-is-it-11644353564?mod=article_inline