Be Still My Heart

For me, this past week filled with all sorts of major shock.  I don’t think I have to explain the shocking election of reality TV star turned president.  But we were shocked to watch the stock market fall 5% in overnight trading, only to rally during the day following the election…and it went up the rest of the week inexplicably, with the Dow closing at all time highs this week.  Last week ended with my winning the Fauquier Chamber of Commerce’s 2016 Businessperson of the Year.  In the company of the amazing candidates that were also nominated, I was totally shocked and humbled to win and simply focused on not tripping on my way to the stage!

All of these events were very unexpected, the very definition of long shots!  They were the statistical equivalent of the tiny tails of the bell curve that are extremely unlikely. But they happened.


As John F. Kennedy said: “There is nothing more certain and unchanging than uncertainty and change.”  That was certainly found to be true this past week!

In reflection of change and uncertainty, there are three direct financial planning observations:


  1. When investing, the tails of the bell curve—those that measure improbable outcomes—are remarkably fat. With multiple shifting risks and unknowns, the range of possible investment return outcomes is very wide.  figure-1Because the prediction of investment outcomes is so uncertain, the best protection against unexpected shocks is a globally diversified, prudently invested portfolio.  And, the discipline to hang on for long run.
  2. In insurance planning, it would be expensive and nearly impossible to insure against every possible negative life event. So, insuring against those negative events that are low frequency events but catastrophic impact is critical.  riskmatrix22We highly recommend that you speak with your insurance agent for a review of your total insurance portfolio to be sure that you have the proper coverage.  If you don’t have a trusted agent, please call us—we work with several local agents who are excellent!
  3. While death is the ultimate certainty, the timing is the largest uncertainty in your life. While planning for the event of your untimely demise is never fun, the estate planning lawyers in Houston state that estate planning is crucial to protect your family, your estate, and your wishes.  Again, if you don’t have a trusted attorney, let us know and we will introduce you to several great ones locally.

By very definition, it is difficult to be prepared for surprises.  But the more we expect the unexpected, we hope the less shocked we will be, and recovery will be quicker!

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