Friday, October 24, 2014

Slow Mo

 As I have noted in several blog posts, before I was an investment advisor, I imported wine, olive, and balsamic vinegar. The balsamic vinegar that I imported was produced by a friend of a friend in Modena, Italy. His name is Massimo Bottura. Massimo is a chef, and his restaurant in Modena has been awarded three stars by Michelin for the past few years. Massimo has become quite a famous chef and recently published a book called Never Trust a Skinny Italian Chef.  

Massimo turned me on to a growing movement in Europe at the time called “Slow Food,” which caught on here in the United States many years ago. Slow food was a reaction in Europe to the rising number of American fast food chains then spreading across the Continent. The tipping point came when McDonald’s opened a store at the base of the Spanish Steps in Rome.
Slow food is a state of mind; it’s about eating food that is fresh and healthy, food that is pesticide and chemical free and accessed in a way that is beneficial to all.Slow food is also a lifestyle choice; it’s about slowing down and enjoying the proverbial roses. 

I view investing in a similar fashion. Like the Slow Food movement, it’s organic, and it needs time. Wealth is created slowly, by saving and riding out the ups and downs. Investing should be boring.

When Warren Buffet was once asked how the average person gets rich, he answered: “Spend less than you make, always be saving something. Put it into a tax-deferred account. Over time it will amount to something. This is such a no brainer.” I love Buffet’s mantra, “Boring is beautiful.”

It is hard for me to believe that the man I was driving around Emilia-Romagna with tasting balsamic vinegar is now one of the world’s most famous chefs. In the last few weeks he has been on Charlie Rose and Jimmy Kimmel. He even created a special hamburger for Shake Shack. When interviewed by Charlie Rose, Massimo spoke of the concept of “making simple the difficult thing.” As a purist and true believer in simplicity, I love that idea. Whether we are talking about food, wine, life, or investing—keeping it boring and simple, that is the road to success.

Thursday, October 16, 2014

Take Me Away

Okay, somebody call a time-out. Things are getting a little too edgy. Everybody back to their corner, now! We know that we live in a 24/7 news cycle world. It never stops—they’ve got to keep you scared and interested so you don’t change the channel or stop looking at the screen. 

I’m taking a breather. This week no market volatility discussion, no recession talk, no Ebola—let’s sit back and open a nice bottle of wine and breathe. Ahhhh, relax, and let’s enjoy the weekend.

A long time ago I gave up drinking chardonnay, especially that overly oaken beverage they claim is wine. Did you know that some California wine producers actually soak their juice in wood chips to get that oaky flavor? 

Recently I have been drinking one of France’s treasured wines, Muscadet. Muscadet is sometimes confused with the sweet wine muscatel, from the grape varietal muscat. Muscadet is a dry white wine from the Loire Valley. The wine is made from the muscadet grape, sometimes called melon. It is bone-dry with a little bit of a mineral taste, in a good way. There are several growing regions within Muscadet; the most famous wines come from Muscadet Sèvre et Maine.

What I love about Muscadet is that you can taste the fruit. It is not overpowered by oak or wood chips. It is subtle and elegant. Muscadet is best served with shellfish, but at a recent lunch I enjoyed a glass with Pork Milanese and a frisée salad—perfection!

Muscadet is best enjoyed young, so purchase a bottle from a recent vintage (within the last two years). Another great thing about Muscadet is that it is cheap. You don’t have to spend more than $12.00 for a good bottle.

Two bottles that I have enjoyed recently were from Château de la Chesnaie 2013 and Domaine de la Tourmaline 2012.

Go ahead, put your worrying on hold, or better yet, let it drift away and buy a few bottles of Muscadet this weekend. Prepare a pot of mussels or buy some fresh oysters and shrimp and Muscadet—take your troubles away.


Wednesday, October 1, 2014

Wouldn't It Be Nice

October is here: autumn foliage is getting into full gear; it’s time for apple picking, pumpkin carving, drinking pumpkin beer; and the stock market is getting a bit more volatile. Statistically speaking, 25 percent of all 6 percent moves in the stock market (up and down) have occurred during the month of October. What does that sentence mean, and what does that mean for your portfolio? Simple answer: absolutely nothing!
We have all grown a bit complacent following the financial crisis of 2008–9. Since then, global markets have rebounded nicely, and one begins to wonder, “Why don’t I just own stocks? Why don’t I just own GoPro or Alibaba?”
I like to tell clients that it would be great if stocks went up every day, but they don’t. You have to accept that with up comes down. Over the past few months I have been reminded of the importance of asset allocation. Headlines announcing the current geopolitical risks—Hong Kong, ISIS, Ukraine—have heated up, making the daily swings in the stock market more pronounced.
Now is a good time to ask yourself some questions: Have my views about investing changed? Can I stomach another downturn? Have I become too conservative? Do I need to rethink my portfolio construction? It’s also a good time to review your savings goals: Do I have enough saved for retirement? Can I put more money away? Have I saved enough for my kids’ college tuition? What do I want my legacy to be? What kind of charitable contributions can I make?
I am not negative about the stock market; I am actually agnostic about it. No one knows from month to month what will happen. I do know that over time the market goes up more than it goes down. And I know that at some point I would like to retire, have a nicer bicycle, and play more squash. How about you?
It’s true, we can’t control the markets—but we can control our goals, and we can do a lot to create the outcomes we want and need.