What We’re Thinking

We’re thrilled to share that Park Piedmont has been named a finalist for RIA of the Year in the “Under $1 Billion in Assets Under Management” category by RIA Intel. (As of the end of May 2024, PPA manages just under $1 billion for our clients.)

“RIA Intel is delighted to announce the finalists for its third annual RIA Intel Awards.

“We had close to 300 nominations across 12 categories, from massive RIAs to entrepreneurs just starting out. Our finalists were chosen from an extremely talented pool of candidates who represent companies and people that are changing the face of wealth management …

“This year’s was the largest pool of candidates ever, with almost 300 nominations from the best and brightest of wealth management.”

To read the full announcement and view the list of finalists, visit the RIA Intel Awards website. Award winners will be announced in June.

We’re honored and grateful to receive this recognition. We want to extend our gratitude to our team for their dedication to our clients and to our clients for placing your trust in us for over two decades.

It is our immense pleasure to serve you and your families. We look forward to continuing to offer principled, personal, and practical financial guidance to help you gain clarity and peace of mind in your life with money.

Amy Gallo, a client of Park Piedmont, has dedicated her career to helping people improve their lives at work, asking and answering questions such as:

How can we make our work environments and relationships more positive and less stressful?

Amy is a workplace expert who writes and speaks about gender, interpersonal dynamics, difficult conversations, feedback, and effective communication. She is the best-selling author of Getting Along: How to Work with Anyone (Even Difficult People) and the HBR Guide to Dealing with Conflict, as well as hundreds of articles for Harvard Business Review. For the past four years, Amy has co-hosted HBR’s popular Women at Work podcast, which examines the struggles and successes of women in the workplace.

Amy is frequently sought out by media outlets for her perspective on workplace dynamics, conflict, and difficult conversations. Her advice has been featured in the New York Times, the Wall Street Journal, and NPR.

We caught up with Amy to talk about her work as well as her own life with money.

We spend so much time at work – and yes, it’s to earn money – but work is such a huge part of our lives beyond that. Given your focus on the workplace, do you think of your work as helping people navigate life with money?

Amy: I do think about it that way – in two ways, actually. One is that conversations around money involve a lot of conflict – or perceived conflict – in terms of asking for raises, negotiating a salary, trying to figure out what your bonus is going to be, or even talking to your friends or partner or colleagues about money. There’s a lot that I talk about that is very relevant to those conversations.

And also, for a lot of people, if you ask them why they work, they would say it’s to earn a living. And if that’s your only reason, it’s going to be a pretty soulless endeavor. But many of us have other reasons for working, and one of them is having relationships with people. And I feel as though having those be as positive as possible is helping set people up for success.

My overall mission is to make work less stressful for people and to normalize conflict and disagreement as an inevitable part of interacting with other humans. And I think in all my work – whether it’s with Harvard Business Review, my own speaking, my books – that is really what I’m trying to do: help people have fewer sleepless nights and enjoy work and their relationships with their colleagues more.

Thinking about your own life with money, what is the best gift you’ve ever given?

Amy: My husband turned 50 during the pandemic, and he is an extreme extrovert. He would have loved a huge party, which we obviously couldn’t throw for him. So, I asked friends and family to send pictures and a little toast to him, and I put it all together in a book.

It cost me very little – it had little to do with money, but it was just a representation of his life. And this is a bit morbid, but he always jokes that his biggest regret after he dies is not hearing the eulogies at his funeral. So I sort of thought of that: “Please eulogize him so he can actually hear those things!” And it’s true! Oftentimes we don’t say those things until someone has died, and that’s the saddest thing.

Park Piedmont Client Amy Gallo. Photo Credit: Stephanie Alvarez Ewens

What is your favorite savings tip? How do you make saving easier for yourself?

Amy: Honestly, the thing that has helped me most was being raised by a single mom who had to be very careful with money. And I really saw – and I think she was explicit about this – be independent financially. And from very early on, that had me thinking, how do I maintain that independence? No matter how much I rely on the people around me, how do I make sure that no matter what happens, I feel safe and secure? So that’s sort of a mindset thing that I think has really helped.

And then another thing is, my family always jokes that I’m squirreling away money in my savings account. Sometimes I say, “Even if I just transfer a tiny amount every week or every month, at least it’s building.” And I like numbers, I like seeing it build. Even in my 20s when I was making very little money, just putting a little bit away gave me the sense that 1) I was building my security, and 2) it’s just nice to see that number grow.

And also, I have a couple accounts that I don’t even think about. I try to have experts who are thinking about them, but those are just off to the side for later. It can be easy to just think short term, and there are expenses that will come up that would be lovely to spend money on, but I also just think – not thinking about those accounts, not regularly interacting with them in a way that they become part of the calculation around my spending is really helpful.

In all my work, there’s short-term versus long-term goals. If you engage with the long-term goal on a regular basis, you’re going to quickly turn it into a short-term goal, right? You have to give it space and time. And I’m a huge fan of outsourcing, right? I’m not an expert in investing and in money. That’s why I have experts to do that.

What’s the last thing you purchased that brought you joy?

Amy: I actually have it right here! It’s a candle. When I go to London for work, which I do once or twice a year, I always stay in the same cute boutique hotel. And I love this hotel. It’s super well-designed, the staff are amazing, and I love being there. This time when I was there – I was just there two weeks ago – I thought, how do I bring some of it home? And they have these candles which actually smell like the hotel – they must scent the hotel with this scent. So it’s a small thing. It really didn’t cost much, but it helps me tap into this nice memory.

Speaking of stress, is there a decision you’ve made, or a step you’ve taken, that has made your life with money less stressful?

Amy: This is going to sound as though I’m pandering to you all, but it’s so true. The first time I hired a financial advisor – the one I worked with before Park Piedmont – I thought I didn’t have enough money to work with a financial advisor. But once I started working with him, I realized you can have twenty dollars or you can have 20 million dollars, but you might not know what to do with it. And it just took my stress level down. And especially since transitioning to Park Piedmont, the level of expertise and trustworthiness has reduced my stress enormously.

What led you to transition to Park Piedmont?

Amy: I had outgrown my previous financial advisor, and I knew the fees they were charging were actually quite high. And Park Piedmont, Tom in particular, had come highly recommended from a friend. Actually, two different people in my life know Tom in different ways. And I’m an obsessive researcher when I’m making a decision, and my research about Park Piedmont was glowing. I felt like everything I was finding out was so positive.

What do you wish you could tell your 20-year-old self about life with money?

Amy: I think what I would tell her about life in general is, “Don’t worry so much. You’re doing the right things, you have the right mindset. Things will work out.” And I think I’ve been pretty good about this, but also just making decisions that are driven by values, and not necessarily by finances. And that has really paid off for me. I have a career that I love that supports me and my family. And it’s so aligned with my values and what I care about in the world.

I don’t know if I knew that was possible when I was 20. I think I thought you could make a lot of money, but you would have to hurt people in the process, or you’d have to do things against your values. And I was really struggling with that. So I think I would tell myself, “Just keep following your values. It will work out. You have to think about money – you know, I was still squirreling away – but just trust the process and it’ll happen.”

Park Piedmont clients are entrepreneurs and homemakers, world-renowned physicians and award-winning authors and directors, the founders of startups and the owners of closely-held businesses, and young professionals and retirees.

The common thread is that they are thoughtful, intelligent people doing good and interesting things with their lives.

Today we’re kicking off a new series to help our clients get to know other clients in our extended community – others who look to Park Piedmont for financial guidance that’s principled, personal, and practical.

We begin with Peter Brill and Wendy Lewis, who have been traveling the world together since January 2022 – by sailboat. We caught up with them as they prepared to pass through the Panama Canal and asked them to share a bit about their adventure around the world – and to reflect a bit on life with money.

The interview has been edited and condensed for clarity.

Whose idea was it to travel the world by sailboat? Did either of you need convincing?

Wendy Lewis: We first went sailing together off the coast of Hawaii, and I was overwhelmed with joy because it was so much fun. And then later we were out on a charter in the British Virgin Islands, and I turned to Peter and said, “Have you ever thought about sailing around the world?” And he said, “Don’t mess with me because I have. It’s a dream.” And I said, “Really? Let’s do it.”

Peter Brill: Yeah, we shared it from the beginning. And the timing was right. Our children were adults and in a good place, and both sets of parents had passed away so we were no longer caring for them. And things were opening up after Covid. So we made the decision pretty quickly, but we’ve remained flexible in terms of making travel plans. There are different constraints to consider for traveling by boat versus over land – like hurricane or cyclone seasons, winds, and currents. And when you’re traveling the world, you’re also thinking about changing political climates, safety and security, and of course budgeting. Park Piedmont’s “How Long Might Your Money Last?” illustration has been helpful in that regard.

What is one purchase you’ve made that felt especially weighty – or filled with possibility?

Wendy: Buying the boat! We knew we wanted this particular boat because it’s set up for sailing in the way that we wanted to sail. It’s safe and it’s sturdy, but it moves fast and it’s fun to sail. So that purchase felt like a leap!

Peter: Yeah, we sold everything. The house, the cars – the boat is our home now. We purged a lifetime’s worth of stuff. We don’t have any possessions except for some artwork, books, and photographs – some personal stuff like that, but no furniture or anything. If we have it, it’s in the boat with us. And we’re just going to do this until we decide otherwise – I guess if it stops being fun, or if there’s a health issue, or if something else comes up that shifts our thinking.

Wendy: We’re thinking 5-7 years, or maybe 7-10.

Peter: And we’ve been aboard for over two already!

Have you discovered any tips for saving during your travels?

Peter: Yeah, here’s a big one: if you don’t purchase health insurance coverage for the US, you save an enormous amount of money. Colombia is an example of an advanced, modern, cosmopolitan country with good, affordable healthcare. There’s actually something called dental and medical tourism – people who fly from the US to Colombia to get first-rate, affordable healthcare. So we’ve saved a lot of money by paying out-of-pocket for minor expenses and by purchasing insurance based in London for major medical expenses we incur anywhere in the world – even in the US, though not for longer than a month.

What’s the last thing you purchased that brought you joy?

Wendy: We love artwork, and we recently purchased a little wooden sailboat that someone made in the Guna Yala part of Panama, an indigenous area. They make the sails out of anything – just sheets sometimes. And there are these beautiful traditional textiles that the Guna Yala make, called molas. They’re entirely hand stitched, and many of the women wear these on their clothing – like with a collared blouse. They’re so beautiful. So we bought one of those too. Both purchases have brought us joy.

What do you wish you could tell your 20-year-old self about life with money?

Wendy: It’s okay to follow your heart, and money will follow. I really bet that you’ll work it out. Another thing is that it’s okay to splurge every once in a while. You do need to save, but – my dad was a great caregiver and took care of our family financially. But one day after he retired he said, “You know, I think it’s finally time to start spending this money that I’ve saved.” And that really struck me. He and my mom had dreamed of going to Europe and to places where he had served in the war. And then unexpectedly, he was sick. He’d always been super healthy, but he passed away in six months. So they didn’t get to go on that trip. I was just barely 30 when he passed away, and it really stayed with me. So in a way, that was also a lesson to that younger self: save but also enjoy, because all you have is what is immediately in front of you, you know? So much about money is about saving for the future. That’s important – I don’t want to discount that – but all we have is right now.

Peter: I would say, “Tranquilo.” Don’t worry so much about money. I think I spent too much time worrying and feeling anxious about it. There’s so much energy consumed in worrying, and it isn’t helpful. So I would tell myself to spend that energy on something else.

What is one decision you’ve made, or step you’ve taken, that has made your life with money less stressful?

Peter: Before we left, we needed to organize our finances and streamline everything. Turning everything over to Park Piedmont pursuant to our values and our desires has been great. We don’t fuss over it, it’s not something that requires a lot of energy or bandwidth on our end, and that’s the choice we like.

Wendy: The thought and care that the Park Piedmont team puts into their work has been great for us – it’s something we don’t have to worry about when we’re traveling, so that’s huge.

What’s the best gift you’ve ever received or given?

Wendy: Time – the gift of spending time together. And also unconditional acceptance from someone. Money can of course help with things like spending time together – like giving us the ability to bring our kids here, or for us to go back and visit them. But if we’re talking about something specifically related to money, the best gift I’ve ever received was when I was traveling in Africa with my brother. He paid for us to trek and visit gorillas in Rwanda. We loved it so much, we went a second time and were lucky enough to see a newborn baby gorilla. The whole band was celebrating its birth. It was amazing.

Peter: I think the best gifts are experiences – being with loved ones, with family and friends.

During your travels, have you noticed differences in “life with money” (approaches, mindsets, etc.) in other parts of the world – that perhaps have even changed your own?

Wendy: Traveling has allowed us to meet so many creative, resourceful, entrepreneurial, and funny people – and to experience value systems that are different than we typically see in the US. For example, we’ve experienced overwhelming generosity from people who may live very differently economically. They’re so eager to help us – sometimes it’s related to money, sometimes it’s related to time, and sometimes it’s related to understanding the language. It has changed me in ways that will impact how I interact with people when we go back to the States.

Peter: Yes, and if someone helps us out with something, our reaction is to ask, “How can we pay you?” And they’re like, “Pay us? You don’t need to pay us!” In many ways, resources allow us to do amazing things like travel. But money makes life more complex – it doesn’t guarantee happiness, fulfillment, or peace.

April 15, Tax Day: the culmination of our annual season of data-gathering, number-crunching, and spiritual reflection.

What’s that? You don’t use tax season as an opportunity for self-examination and renewal?

OK, fine – me neither.

Tax Season is a time-intensive, laborious grind, and you’re no doubt in good company if you offer a grunt of thanksgiving when it mercifully wraps up.

In many ways, taxes fall outside our sacred considerations.

And yet — our religious and spiritual traditions (they’re sometimes also called our “wisdom traditions”) locate in taxation a chance to reflect on the delicate, often precarious balance between ethical individual action, just leadership, and the redistribution of resources to meet ever-present social needs. For example:

• Jesus and the Gospel narratives are intentional in discussing taxation, spotlighting individual values like integrity and generosity along with big-picture aims like an economically just society.
• The primary form of wealth distribution mandated in Islam – indeed, one of the five pillars of the faith – is Zakat. Zakat isn’t synonymous with tax – but for Muslims meeting a baseline level of wealth, it’s obligatory and serves the same end of social welfare. Beyond that, it’s viewed as a kind of worship – a way to purify wealth by providing for those in need.
• The same goes in the Hebrew Bible and Talmud. Public services, priestly work, sanctuary construction, care for the poor: all were funded by broadly assessed taxes.

Of course, there is room for healthy, constructive debate about how much taxation is appropriate. Regardless of one’s opinion on that topic, our wisdom traditions generally agree that the process of preparing and paying taxes offers individuals a platform for ethical conduct. We can direct attention to the needs of the neediest in our midst, while supporting a stable and just social order. Indeed, given the very human temptations we all confront in the tax prep process – think coveting and cheating, to start – tax season may in fact be one of our most potent spiritual proving grounds.

Here’s something curious.

This week The Wall Street Journal published the results of a survey it conducted with several thousand swing state voters. The paper asked about political preferences, naturally, but its questions extended into the survey respondents’ views of the economy.

According to the Journal, about three-quarters of respondents said inflation had moved in the wrong direction over the last year. This assessment was widely held across all seven states – and is in direct conflict with hard economic data.

As the Journal’s Greg Ip writes, “In the 12 months through February, inflation, according to the century-old consumer price index, was 3.2%, compared with 6% a year earlier. Use a slightly different time horizon, or a slightly different measure (such as the index the Federal Reserve prefers) and you get similar results. Take out food and energy – or for that matter look only at food and energy – and inflation is still down… Yet the average person thinks it went up.”

A similar finding cropped up around recent market returns. More Journal survey respondents believed their investments or retirement savings had declined during the previous year – even though 2023 was “a period in which the stock market roared to record highs, home values held steady or rose, and interest on savings went up.”

What’s going on here? Ip sees an ongoing battle between vibes and facts – with vibes apparently pummeling facts.

One way to begin to understand this better lies in the insights of the field of behavioral economics. The research of the Nobel-winning psychologist Dr. Daniel Kahneman, who died last week at 90, poked fatal holes in long-standing economic assumptions about the rationality of human decision-making. Kahneman found that the brain makes quick decisions using incomplete information, often leading to unfortunate outcomes.

As his Bloomberg obituary reported, Kahneman told the American Psychological Association in 2012: “People are designed to tell the best story possible… We don’t spend much time saying, ‘Well, there is much we don’t know.’ We make do with what we do know.” (In a future Life with Money essay, we will delve deeper into the work and influence of Dr. Kahneman and the wider field of behavioral economics.)

Other factors, also part of the behavioral economics landscape, are plausible, too.

Emotional Influences: Our emotions can powerfully shape our perceptions and decision-making. When someone experiences “vibes” – whether positive or negative – about a given something or someone, these emotions can override rational analysis or factual evidence.

Cognitive Biases: Cognitive biases affect us all, in particular the ways we digest information. Confirmation bias, for example, pushes us to gather information that supports our pre-existing ideas or feelings, while discounting evidence that runs to the contrary.

Going With Your Gut: Intuitive thinking works quickly and automatically, based on unconscious processes and memory. We often go with our gut, our intuition, even amid a lack of concrete evidence.

Complexity and Uncertainty: When navigating uncertainty, vibes offer a way through. Instead of sifting through messy, often conflicting facts, we occasionally go with a simpler, quicker decision-making process.

Group Identity: Humans tend to align ourselves with groups, identities, or brands that share certain values or stories. When a particular vibe resonates powerfully within one’s social cohort, the feelings can be reinforced, even though they conflict with objective facts.

For all of us, in ways both observable and unconscious, our behavior is shaped by a constant, complex interplay between our thoughts, feelings, preferences, and incentives, not to mention broader social dynamics. But being attentive to these emotional and cognitive influences – whether they’re related to personal finances, the broader economy, or other areas of life – can help us think more critically and engage more intelligently when encountering both facts and vibes.

To say that the Park Piedmont team is a group of animal lovers would be an understatement.

Tom, Nate, George, and Heather are all dog owners, while Sam, Leslie and I are owned by our cats. Catching a glimpse of someone’s pet while on a Zoom meeting is frequently a highlight of our workday.

We also love it when we get to chat with our clients about their pets, and any fun stories or pet photos we receive are usually circulated for the whole team to enjoy.

Earlier this year, Tom wrote a “Life with Money” piece that explored the ways we invest in our relationships, and how those investments can offer the highest and most-predictable return on investment. So when a recent Pew survey found that almost half of U.S. pet owners consider their pets to be as much a part of the family as their human counterparts, we couldn’t help but get curious about how this expanded relationship might impact pet owners’ financial behavior.

According to a recent article from Forbes, 66% of U.S. households own at least one pet, compared to just 56% in 1988. Annual spending on our furry friends has increased too, with $136.8 billion spent on pets in 2022 – up from $123.6 billion in 2021.

More than 23 million American households adopted a pet during the pandemic, according to an article by the Washington Post, so the increase in pet ownership and spending isn’t surprising. What we wanted to know is, how did the increased spending on pets affect peoples’ spending in other areas?

I often joke that I spend more per month on food for my two cats, Luna and Vin Diesel, than I do on food for myself, and George recently remarked that he eats generic cereal so that his dog, Penny, can eat like royalty. Do pet owners find themselves cutting back in other areas so that their animal counterparts can live the high life?

That same Washington Post article interviewed several dog owners across the country, who remarked that they’ve gone to such lengths as having fewer date nights and cooking at home more, or even delaying purchasing their first home, due to the amount they spend on their pups. Budgeting for veterinary care, both routine and emergency, also factored into their spending decisions.

Two recent surveys from pet care site Rover.com found that the majority of pet owners consider their pets a top financial priority, even at the expense of their own necessities. According to the surveys:

• 81% of pet owners said inflation is impacting their food bills and 41% of dog owners have cut back on their own groceries as a result.
• 37% of pet owners said there’s no amount of money they would accept if it meant they could never have a pet again, and at least a quarter said it would take $1 million or more for them to give up their pets.
• 44% of pet owners would take a lower-paying job if they could bring their pets to work with them.

This commitment to pets is also reflected in the roughly $35.9 billion in annual spending going towards vet care, as well as pet insurance to help manage the cost of pet ownership. With the average monthly pet insurance premium being $53/month for dogs and $32/month for cats, the coverage can be appealing, albeit expensive, as a means to help manage vet bills.

Employers are catching wind of the trend too, with some 5,000 companies now offering pet insurance in an effort to attract talent and acknowledge the strong bond between people and pets.

Another interesting trend among pet owners is the rise in pet-friendly home modifications. Architects and interior designers alike agreed in a recent New York Times article that when designing or renovating a home, you may need to consider the needs of both human and animal occupants.

So what features are pet parents considering adding to their homes? According to the article, for dog owners, spaces like special dog showers or custom crates that blend seamlessly into the décor are top of mind. For cat owners, architectural playgrounds (think wall-mounted jungle gym) and hidden litter boxes are ideal.

We don’t only spend money on our pets, though. We also devote intangible resources to them, like time, energy, and love. Reverend Tish Harrison Warren writes about this in a recent newsletter, where she describes her recent experience with hesitation around adopting a dog for her family.

“In an unspoken place inside me, I’d created a zero-sum system where any money, time or energy I gave to a domestic animal was taking away money, time or energy from other humans,” Warren explained in her newsletter. Warren isn’t the only one who felt that tension. In 2022, Pope Francis criticized couples who chose to have pets instead of children.

Warren goes on to explain that her family’s new pooch, Herbie, forced the family to slow down their lives, be gentler, and lean into love. She ends the newsletter by pulling inspiration from a poem written by Herbie’s namesake, George Herbert – a 17^th– century Anglican priest and poet – “Love, without diminishing, always welcomes more.”

We love our pets here at Park Piedmont, and given the opportunity, we’d love to hear about yours, too.

What’s the best investment you’ve ever made?

Reflexively, some might point to a particular stock in their portfolio – maybe they took a flier on Berkshire Hathaway a few decades ago or bought Amazon when it was primarily an online book seller.

Some lucky few might shine their light on something more tangible: a garage sale masterpiece or a rookie baseball card of a long-ago hero; for others, maybe it’s a highly appreciated piece of real estate.

For Park Piedmont clients, and those philosophically aligned with our approach to investing, maybe you’d look not to an individual stock, but instead to a low-cost, broadly diversified, indexed investment – like Vanguard’s Total Stock Market Index Fund ETF (symbol: VTI). We can just picture it now: it’s been invested in over the years, with a disciplined focus on the long-term, avoiding any inclination at market-timing or attempts to outsmart the market.

OK, well done.

But what if, in considering our “best investments,” we widen the lens?

A book I recently read makes the point that doing so may benefit our life’s bottom line.

The Good Life, by Robert Waldinger and Marc Schulz, distills the research findings of the Harvard Study of Adult Development (the “Study”), a remarkable research project that began in 1938 – and is still going strong. The study was initially designed to try and figure out what makes people healthy, and – more than that – what makes people thrive.

Over eighty-plus years, the Study has tracked several hundred of the same individuals, and many of their offspring, recording the granular details of each subject’s life experience: memories of when they were little kids; their first loves; raising a family; work life; leaving the workforce; aging; health ups-and-downs; and the end-of-life – not to mention routine blood work and other medical tests.

Here’s an excerpt from the book’s first chapter:

“Through all the years of studying these lives, one crucial factor stands out for the consistency and power of its ties to physical health, mental health, and longevity. Contrary to what people might think, it’s not career achievement, or exercise, or a healthy diet. Don’t get us wrong: these things matter (a lot). But one thing continuously demonstrates its broad and enduring importance:

Good relationships.

In fact, good relationships are significant enough that if we had to take all eighty-[plus] years of the Harvard Study and boil it down to a single principle for living, one life investment that is supported by similar findings across a wide variety of other studies, it would be this:

Good relationships keep us healthier and happier. Period.” (10)

At some level, this just sounds intuitively right. And yet, the authors note, it can be hard – very hard – to put this knowledge into practice in our everyday lives. They cite two main reasons: first, while “the good life may be a central concern for most people… it is not the central concern of most modern societies… The modern world prioritizes many things ahead of the lived experience of human beings.” (30)

Second, at a more elemental, biological level, our brains, as extraordinarily sophisticated as they are, “often mislead us in our quest for lasting pleasure and satisfaction.” (30) It turns out, we humans are just not consistently good decision-makers at knowing what’s best for us. As a result, we tend to prioritize what’s measurable – wealth accumulation, status, achievement, to name a few – when those markers, while no doubt important, are not as lastingly important as we, or the broader culture, might assume.

This is an important point that Dr. Waldinger, the co-author, makes in an accompanying lecture. In balancing work, money, and relationships, the emphasis should be “both-and,” not “either-or.” Having sufficient financial resources is crucial for helping people feel, and be, secure. As Dr. Waldinger reports, the trouble arises when people place too much weight on work, wealth accumulation, and social status, leaving too little time and energy for the relationships in their lives.

So, let’s return to our opening question: when we think about our best investments – and what gives us the best bang for our “whole-life” buck – what if we turn the spotlight onto our relationships? As The Good Life informs us, after eight decades of scientific research, it’s time spent on our relationships – with family, friends, community members – that offers among the highest, most predictable returns on investment.

Rarely but inevitably, a single event will flip the world upside down – the kind of improbable, unexpected thing that occurs on a day just like any other, but then alters life as we know it.

Sometimes that thing is devastating, such as a freak accident or the sudden death of a loved one. Sometimes it’s delightful – a newfound opportunity, a chance encounter, or a lucky break.

I first learned about Nassim Nicholas Taleb’s “black swan theory” in February 2020. Little did I know that a black swan event was about to alter my world – and everyone else’s as well.

I was reading a review of Taleb’s The Black Swan: The Impact of the Highly Improbable, written by our late cofounder Victor Levinson in 2007. Taleb defines a black swan as an event with the following attributes:

“First, it is an outlier … because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”

Vic explained the metaphor: “The Black Swan references the idea that there was a time in the past when only white swans appeared, to the point where people thought only white swans existed. It took the appearance of one black swan to change that ‘certainty.’”

Had I known the pandemic was just around the corner, I would have predicted that the markets would tank. And they did – for about a month.

And yet, as we noted at the end of 2020, “the stock market recovered surprisingly (in many cases, stunningly) well after bottoming out in late March … The Vanguard U.S. Stock Index Fund, which represents all the public traded companies in the U.S., rose 21%. The stock indices are at or near all-time highs.”

It turns out, the markets are so unpredictable that even knowing ahead of time about a black swan event does not guarantee how markets will react to it.

To quote ourselves again in late 2020:

“As compiled by Bloomberg and reported by Jeff Sommer, ‘[In late 2019] the median consensus on Wall Street was that the S&P 500 would rise 2.7 percent in the 2020 calendar year.’ That, of course, turned out to be dramatically low.

“A few months later, in April 2020, as the coronavirus stopped the global economy in its tracks, forecasters hit reset and issued another set of predictions. Per Sommer:

“‘They said the market would fall 11 percent. But the market had begun climbing on March 23, the day the Fed intervened to stem panic. The strategists failed to register the change in direction. If you had invested, based on their predictions, you would have missed a great bull market.’”

Jason Zweig of The Wall Street Journal had a similar conclusion:

“To me, the lesson of 2020 isn’t that a giant, unpredictable ‘black swan’ can wreak havoc with the best forecasts. Instead, the lesson is that whatever seems most obvious is least likely to happen.”

Zweig continues: “The only incontrovertible evidence that the past offers about the financial markets is that they will surprise us in the future. The corollary to this historical law is that the future will most brutally surprise those who are the most certain they understand it.”

“Uncertainty is the only certainty there is,” according to mathematician John Allen Paulos. “Knowing how to live with insecurity is the only security.”

We agree, at least about the certainty of it. As Vic wrote in response to the wildly unpredictable markets in Spring 2020: “Since no one can predict the future, uncertainty must be considered…”

We all experience life-altering black swans, whether personal or widely shared. So how, then, might we “live with insecurity,” at least from an investment perspective?

Our recommendation is the same now as it was in 2020:

“Review your portfolio to ensure that your asset allocation remains consistent with your goals, risk tolerance, and time horizon. If they’re aligned, stay the course. If they’re not – or if you fear they may not be – we can help you make thoughtful, deliberate modifications.”

In short, an appropriate asset allocation can and should offer you peace of mind – even in the event of a black swan.