Sex, Marriage and Your Stock Market Performance

The Stock Market Doesn’t Reward You For What You Know, But For What You Do

Tell me if you also agree with this math…

If you are married and the sex is bad, then bad sex is 90% of the marital problems. But if the sex is good, or at least good enough then sex only accounts for 10% of the goodness of the marriage.

And then you have the other 90% of the marriage that needs to be worked on. For many this comes down to how couples communicate… mostly about money. Note: this is not going to be a post on why your marriage would be better if you both were on the same page. It would. But you already knew that.

This post is about how sex and stock picks account for the same amount of goodness (10%) in people’s lives.

If an investor owns the wrong symbols then that is 100% of their problem. Role tape on every Big-Box adviser promo and every “pick of the month” newsletter promotion ever.

The Stock Market Does Care How Much Effort You’ve Put Into Your Portfolio. It Doesn’t Care How Many Newsletters You Have.

In fact it does really even care about your age.

The problem… once you get the stock pick right, now you’ve only solved 10% of your investment problems. What remains is 90% to solve AND none of this 90% has anything to do with symbols, sectors, segments or stocks.

Gulp.

In the documentary film, Super Size Me, Morgan Spurlock spends an entire month consuming McDonalds meals. Everyday. Three meals a day.

For. A. Month.

And if he was asked to get his meal super-sized, he said yes.

The outcome?

Not good.

After a month of 5,000 calories a day of low quality fast-food meals, Spurlock was sick. He gained 24 pounds, his cholesterol level jumped to 230 mg/dL, was depressed and was sexually dysfunctional to boot.

Fast Food Investment Calories Is What’s Killing People’s Portfolios

In the world of investing, Super-Sizing is the same as going from one “pick of the month” newsletter subscription to the next… or from one Big-Box adviser to the next.

What started as a curiosity (newsletters) ends with tens of thousands of dollars in subscription costs and a smaller portfolio. Same goes for the Big-Box but there are no subscriptions just fees that mirror free or nearly free funds.

Fourteen months is what it took Morgan Spurlock to get his health back to pre-McDonald’s health. By the way, I still love McDonald’s fries but I only have them two or three times a year. Usually when I’ve had a really bad day and I want to check out for a bit.

Unfortunately most investors will remain stuck in the fast-food world of investment information. Their livers will get fat (read: worse than actually being fat) and their world will continue to decline both mentally, physically and financially just like Spulocks.

The thing is the world of dopamine-rich investment headlines is as addictive as sugar or heroin.

Napoleon Hill in Think and Grow Rich said, “…knowledge only becomes power WHEN and IF it is organized into a definite plan of action and directed to a definite end.”

All Apollo Astronauts Were Trained. Not Schooled. Not Learned. Not consumed. Training is the equivalent of leafy green calories.

Stephen Covey had this to say about knowledge. “To learn and not do is not learning. To know and not do is to not really know.”

Ouch!

(the doer)

The standard 60/40 stock/bond split portfolio will likely become the fast-food equivalent of empty investment calories in the next few years.  Why? Because people are still consuming the low quality idea that bonds equal safety.

Here’s the thing. Bonds use to mean “safety” in the 1980s and 1990s and even in the Aughts. But something is changing (changed?).

Honestly the most powerful price chart of the past 35 years is not of stocks or Amazon’s takeover of everything . It’s the price of the US 30 yr bond.

Take a look at this thing.

It’s spectacularly impressive.

30 year US Bond Price Chart

35 years of [almost] straight up.

And when the stock market was falling this bond did even better. It was stable when the stock market was going up, when the stock market was going sideways and when the stock market fell.

Seriously… has there been anything this stable for this long, ever? If you have a candidate, let me know.

It just kept going up [over time].

Jeff & Bill think the risk in the investment world is in Bonds and not stocks. And that’s with a Shiller P/E ratio of 32.75!

I’ve talked before how Jeff Gundlach and Bill Gross (the two best bond investors on the planet) have called for a top in the bond market.

Whether their calls are right we won’t know until we are through the next recession but for now to be safe, let’s just say, “things are changing.”

What we can be sure about is that this, this 35-year trend will not be going on for another 35 years. Because if it did then the US would have a 30 yr bond yielding a negative 12%.

And without an ounce of predicting-ness in my voice, I think we can be pretty sure. Investors will not be lending their money to the US Government at a negative 12% annual return. As they’d be out of money in eight years.

So… what to do?

Develop a verifiable approach that allows you to sleep at night. Instantly fact-check any newsy sounding story about investing that scares you and always make sure you will not be a burden on anyone. Oh, and make sure your loved ones are taken care of too.

And about that whole sex thing and marriages…

It’s a weird thing to talk about and even mention in an investment post. But it’s true.

Once the problem right in front of you is solved (sex for marriage and stock symbols for investing) then one is able to focus on the real problem. And see that the sex was just a symptom of the problem.

The real problem in marriages is communication. And for investing…? It’s behavior.

Start solving the real investment problem by working on that other 90% of investing. It’s the easiest place to start.

In Your Corner,

RCPeck-Dig Signature.JPG     
RC Peck, CFP

P.S. “Don’t think. You already know what to do, and you know how to do it. What’s stopping you?” Tim Grover.

For those of you that already know a conversation would help you get what you want then here’s your chance. Let’s get on the phone come up with a plan and talk about next steps. What’s really stopping you?

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