All That Matters: Summer’s Over. What Matters Now?

What are “rates,” and what are they doing? Is the economy doing as poorly as the news suggest? And, what really is the better movie: The Godfather II, or Goodfellas? Ross and I tackle all this and more in our latest episode of All That Matters. Check it out here

Dear Reader

Since summer is wrapping up, and the markets have been quieter than normal, I thought I’d drop a list of things I believe about the world.

Everything from food to investing, if you’re looking for a light and breezy end of summer read, I got you covered!

The Surprising Similarities of Pickleball and Investing

Tennis is an incredibly difficult sport.

After a really good serve, the ball is traveling towards you at over 100 mph. You have fractions of a second to respond and even if you can get your racket on the ball, you still have to swing correctly.

The court is huge. You need to be supremely athletic and have the ability to sprint for hours on end.

The degree of difficulty in tennis is high.

The degree of difficulty in pickleball is far lower and that’s one of the main reasons it is wildly successful across all generations (Baird even sponsors pro tournaments!). The number of people playing pickleball grew by 159% over three years to 8.9 million in 2022, according to the Sports & Fitness Industry Association, a trade group.

Take something complex, distill the best parts of it, simplify it, and you can see incredible results.

Investing works like this too.

You could make investing as complex as you want it to be. You could monitor the economy in real time, try to predict the path of interest rates, attempt to gauge sentiment, build a model for uncertain cash flows, and do your best to trade in and out at opportune moments.

But approaching investing this way makes the degree of difficulty very high. There are people who are successful at it (like there are successful tennis players). It’s just hard, and you have to devote your entire life to it (again, like successful tennis players).   

For the average investor who cares about growing their wealth, planning for the future, leaving a legacy to the world, and just living, simplifying investing can be extremely rewarding, just like pickleball is.

Where would you start if you wanted to simplify your investing life? 

First, ask yourself two questions:

1) What is the purpose of this money? 

2) How long do I want to invest it for?

Once you answer those you can start to build a portfolio to address your specific personality. It can be stocks, bonds, alternatives, cash, private equity, a whole host of things, but it needs to be built to who you are, not who someone else is. 

Also, if you want to simplify your investing life, you need to tune out as much noise as possible. How? Frankly by watching less news. News can make us nervous and being nervous impacts our ability to think clearly. News + Human Physiology works against you constantly. I’m not saying watch NO news, just try to watch less.

Finally, the absolute best way to simplify your investing life is to partner with someone. Playing singles in pickleball is fun but the game really shines when you have someone next to you. Advisors can take all the complexity of the modern investing world and distill it down for you, acting as your 24/7 teammate.   

I was pretty mediocre at tennis, especially serving. But pickleball? The simplicity of it speaks to me and, I won’t lie, I think I’m pretty good at it.

I’m ready to go. Who wants to play?

All That Matters: Things That Surprise Us

Where are all the workers? Is the market going to underperform in the second half of the year? And, what does Taylor Swift have to do with consumer sentiment?  In our summer installment of All That Matters, Ross and I answer these questions and share a few surprising elements of the markets and economy today. Watch the video or read the summary here.

All That Matters: Hype Cycle, Fear Cycle

Is artificial intelligence over-hyped? In this month’s episode, Mike and Ross tackle the current AI “hype cycle,” and then reflect on examples of recent “fear cycles” (scary debt ceiling headlines, concerns that the dollar will someday lose reserve currency status, and so on). Watch the video or read the summary here.