3 things I'm thinking about this week...

 
1 - In Theory, It Doesn't Make Sense. Science and math geniuses have been deployed to figure out financial markets for decades. Sometimes it seems like they’ve cracked the code. After all there are dozens of petabytes worth of price and fundamental data for them to wade through. But in the end…I don’t give them much of a chance.
 

This short article from The Economist reminds us that there’s no unifying theory of finance. This quote captures the conclusion: “…finance is ultimately driven by people, not particles, and they do not always respond to similar stimuli in similar ways. They look at what happened last time…try to do better.” That is why the behavioral component of investing is critical in achieving long-term investment returns.

2 - Enjoy the Drive. If you have a financial plan, count yourself among the fortunate…most don’t. Without one, it’s hard to know - will I run out of money? The biggest financial project you will likely ever undertake is making it to and through a long retirement. Maybe a bit of planning and help is in order? A short analogy:

Imagine you’re driving from Newport Beach to Bozeman, Montana for your daughter’s wedding…without GPS. You’ll probably head Northeast at least. And in due time you’ll reach your destination…after some help and a few wrong turns. But late…and with a fair degree of anxiety as well.
 

Adding GPS means: you know where you are at all times, you know when your current driving speed is expected to get you there, and if you make a wrong turn, the system will course-correct and give you updated directions. So, you’ll get there before the ceremony starts and do so with peace of mind and the chance to enjoy the drive. As an aside, I know it’s a computer but it still shows the value of companionship and accurate advice…reminding us that we don’t need (and we’re not even designed) to go it alone.

 

3 - Nix the Negative. Mindset leads to results…either way, good or bad. Negative thinking has helped us historically, it is what’s gotten us here (avoiding tigers) but now leads mostly to stress, depression and anxiety. The cognitive tendency called negativity bias means negative events hit us harder than positive ones. 3 ideas in this article can help flip you into a more positive state. Make daily gratitude a habit (have read this multiple other places). Use negative thoughts positively – to help break bad habits. And connect with others to help break out of a negative mode.

...and one more thing

NASA astronaut Don Pettit turned 70 upon his return to earth in April from the International Space Station. He’s known for taking some incredible photos, included in this article.