If the stock market didn't go down on occasion, sometimes dramatically, then you would not experience the positive long-term results that have historically occurred. How is this possible?
Stock returns in the long run have been quite compelling because of many factors, such as a growing profits. But another factor is something known as the "risk premium."
Think of it this way. A 10 year U.S. Treasury bond is paying around 2% a year. This is not much of a return, especially after inflation and taxes. The trade-off is knowing that you will likely receive the stated interest payments and get your money back at maturity. You just don't get paid much for certainty.
Running with the bulls in the Spanish city of Pamplona can lead to serious injury, even death. How risky is it? According to the website FiveThirtyEight, there was a 0.3% chance of being injured in 2014. In a highly unscientific survey I sent out recently, about half of the respondents chose this figure. A little over one-third of the respondents said they would participate in the event if the probability was this low.
But do people who run with the bulls correctly calculate the risk? After all, FiveThirtyEight called the festival "one of the most jarring examples of how imperfect a process natural selection is ... Literally the only point of going is to survive extreme risk (and to slap a bull on the butt, apparently)."
Choosing a professional, like a dentist or financial advisor, can be difficult when we don't have the requisite expertise to judge their skill level. But there are certain things you can focus on. Check out the video for some criteria to use and how golf balls fit into the equation.
Musical Treat
Dentists help create a nicer smile. Hopefully financial advisors make you smile. Chicago's "Make Me Smile" is a great combination of rock with a horn section. The 1970 live version is worth a listen. (Sadly, the 1977 live version shows the deterioration of the late guitarist/singer Terry Kath.) Other "smile" songs include "Desecration Smile" by the Red Hot Chili Peppers and a take on the classic "Smile" by Nat King Cole.
China overwhelms you -- in a positive way. There is the history, the culture, and the food. There is the size of its cities and the presence of so many people. There is the natural beauty of its mountains, lakes, and rivers. It's hard to convey everything we saw, so I'll focus on some of the broader themes of our experience (as compared to a travelogue).
You say you want a revolution ...
Construction cranes filled the sky of the Chinese cities we visited, adding ever more high rises to the seemingly endless vista of apartment buildings. How could Beijing (population 22 million), Xian (8.5 million), and Chengdu (14 million) become any denser?
The hapless Detroit Lions, the cause of endless frustration, may have done something right for once when they didn't pursue All-Pro defensive lineman Ndamukong Suh in a bidding war that was eventually won by the Miami Dolphins. Suh received a $114 million contract, $60 million of which was guaranteed.
Why do free agents in sports receive such enormous contracts that seem to defy reason? After all, as the website "FiveThirtyEight" points out, Suh's dominance as a player with the Lions may not be replicated in Miami. And even if Suh continues to be a great player, Miami may still have paid him more than he's worth.
