Two spheres for thought
Read an interesting article in the SF Chronicle titled “No buy year spreads on social media”. I can’t say that I frequent personal social media such as Facebook, Twitter or X, TikTok, Instagram but for those who do this campaign for “No Buy Year….” is an interesting social/personal finance experiment where spending is a concern. Pick one item that is a usual purchase and meets a minimum amount and take the pledge and “just do it”. Assuming good spending habits might not be a legacy for any individual and reducing spending or consumption in general is a goal then this might work to achieve those spending goals. Examples of items selected include buying new clothes, another stopped buying carbonated drinks. The focus is on non-essential items. Check out this story with this link: More people make 'no-buy year' pledges as overspending or climate worries catch up with them | AP News
Neuroscience says the brain has two spheres. The left sphere is the data number sphere, and the right sphere is the creative sphere where the whole is greater than the sum of its parts. The financial planning process involves both spheres. Data gathering and software provide the left side input. Lots of numbers-dollars, timelines, ages, equity compensation, insurance coverage, guardian/custodian for minors, beneficiaries, tracking, baselines etc. This is necessary information but not sufficient to make the best decisions. Right side issues include emotions, psychology, feelings, compromise, valuing tradeoffs, prioritizing, collaboration, behavior change, reframing, and much more. Each of us needs to use both sides and the challenge is letting the conversation happen between both spheres. Each side is necessary but not sufficient for making the best decision. I think, as clients, you will recognize this process because this is how we work. We help our clients address each side, performing due diligence for the date and then introducing the conversation between the two spheres to come to the best decision possible at the time. Sometimes what makes perfect financial sense does not feel right for any number of reasons. Money is not always the most important factor in making a decision and that’s OK. But you need to do the work to make sure you have all the necessary information.
Inflation is still lurking as an overhang to market advances. Also lurking is the contribution of Artificial Intelligence stocks to the year-to-date gains for the SP500 and Nasdaq. Today, Thursday, was a funny day making real the asset allocation benefits. All major averages were down with the Dow down over 300 points and the Nasdaq declining by over 100 points. Yet mid and small cap stocks rose today. So overall in the $130 million SAS manages for clients, we had a small gain in our portfolio value. Mid and small cap stocks are less expensive historically than the stocks driving average higher this year.
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