This past month my wife, Amelia, and I returned from a trip to Hong Kong and Beijing, where we visited family in Hong Kong and our son and daughter-in-law in Beijing. The motivating factor for the trip, however, was that Amelia’s sister Joyce, who had been fighting cancer for several years, had taken a turn for the worse. Joyce had been moved to hospice care (called a cancer rehabilitation center in Hong Kong) and was receiving round-the-clock care. She was surrounded by loving family members who had come back to visit and assist her. As I pondered life and death, the words shared by Steve Jobs at the 2005 Stanford Commencement came to mind:

“When I was 17, I read a quote that went something like: ‘If you live each day as if it was your last, someday you’ll most certainly be right.’ It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

He closed with these words of counsel for the 2005 graduates of Stanford that apply to each of us, “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

This week Amelia and I return to Hong Kong to honor Joyce in a celebration of life (she passed away a couple of days after we returned home). The goodness of her life and the faithfulness of her family cause me to ponder my own life. Should I change anything, am I following my heart? As a teenager I learned that laws matter and that they have a purpose. Likewise, I have come to the realization that there are natural laws and they do matter. Death will come to each of us, and for most of us we will have little control over when it comes, but we can control what we make of each day. As I have pondered Steve Job’s challenge, I am grateful to be excited to be doing what I do; I am grateful to work with exceptional people; and I am grateful for the privilege of serving you.

Wishing you Happy Holidays and a Prosperous New Year!

In line with the Halloween season, the recent volatility in the stock market has certainly created its own host of thrills and chills.  If only investing were as easy as trick-or-treating. Wouldn’t it be great if we could ring a doorbell to receive a dividend or net capital gain? Unfortunately, money management is never that easy. But for those investors wandering alone in the dark with nothing more than a glow stick, we offer a few lessons taught to us by our young costumed friends.

First, seek out those with a track record.  Children learn which houses provide the best candy through years of experience and word of mouth. Some houses are just more popular than others. It’s not uncommon to see all the children lined up to get their king-sized Nestlé Crunch bars and bag of Skittles, while the porch of the next-door neighbor sits empty because they are passing out apples, pennies, or toothbrushes.

Use investments that have solid, long-term results. At Prudent Investors Network, we typically exclude investing in assets whose manager has not been in place for at least five years.  In addition, we focus on the five- and ten-year return and not their one-year and year-to-date performance. Five- and ten-year returns will include various market cycles and provide important insight into how the product performs during an upturn and, more importantly, a downturn.

It is not uncommon in our research to see some of the same names appear year after year–in part because of their long-term record.  For the average investor, you can use the resources of Morningstar.com to view the three-year, five-year, and ten-year track record. Of course, past performance is not indicative of future results.

Second, do an accounting of your investments. After a night of trick-or-treating, I still have memories of dumping my orange bucket on the floor and sorting my Tootsie Rolls, lollipops, and Smarties into little piles. Set aside a specific time at least once each year to review your investments and whether they are still appropriate to your financial goals.  Make changes to your investments, when needed, in the context of your long-term investment objectives.  Avoid checking the market every day because it can generate emotional responses that distract you from the proper decision making needed to keep your finances in order.

As we draw close to the parties, costumes, and candy of October, let us remember these simple Halloween lessons.  May you have a safe and happy Halloween!

In case you didn’t hear about the event, on Friday, October 8, 2010, a man with a .357 Magnum revolver in one hand and a gas can in the other began shooting at students who were on the field for lunchtime recess. Two second-grade girls were shot. That part of the incident is the “near tragedy” referred to in the heading of this article.

So, what is the “celebration”? Somewhat miraculously, the injuries to both girls were flesh wounds to their arms…the shots did not hit vital organs or major arteries. Thanks to the heroism of three construction workers who were on site, the shooting suspect did not have time to reload his gun. They chased him down and subdued him until the
police arrived. Monday, three days after the shooting, Kelly students, parents and staff celebrated at their school with a life-affirming picnic. The construction workers were honored and the two wounded second- grade girls came and enjoyed time with their classmates.

I see many lessons that can be learned from this experience:

• Planning is vital: All our schools practice various emergency drills throughout the school year. These drills occur during class time and even during recess and lunch.  At times, both staff and students have thought the drills were annoying…they interrupted class activities and outside games. But the drills paid off. As soon as the “lockdown” notification went out over the PA system on Friday, students and staff immediately responded; and within three minutes, the entire school was in lockdown. No one was hurt in a “stampede” to safety – no one was unsure about what to do. They did what they had practiced.
• Individuals make a difference. Two noon-duty aides slowed down the shooter as he approached the children by asking what he was doing and then contacting the office. The three construction workers who put themselves in harm’s way averted what could have been an unspeakable nightmare. From all accounts, the construction workers are  ordinary individuals who chose to act in an extraordinary way.
• Life is not random. The construction workers were on campus because of a series of seemingly small delays in completing upgrades to the site kitchen. The workers were able to capture the shooter because a shell casing jammed in the gun, preventing the auto load from working. Had the bullets hit three inches in a different direction, Monday’s celebration could have been a funeral. Coincidence? I don’t think so…I believe lives were protected.
•  We need each other. Teachers kept the students calm and busy while they were locked in their classrooms for three hours while the school was “swept” by the police. Parents remained calm and supportive of each other while they waited at the adjacent park to be reunited with their children. The police, fire department, Sheriff ’s department and Red Cross arrived immediately and provided assistance. Since the shooting, parents from other schools have provided lunch for the school staff each day. Counselors and therapists have made themselves available for staff, students and parents. The entire Carlsbad community has offered assistance. Kelly parents and staff said the assistance they have received from others has made a huge difference in their recovery process.

What does this have to do with us? While most of us will never encounter a shooter, we may encounter other life threatening circumstances such as an earthquake, illness, or accident. We can be prepared by having emergency supplies at home, work and in our cars. We can take a proactive approach to illness by exercising regularly, getting necessary vaccinations and eating wisely. We can choose to be the person who makes the difference by speaking up for those who are silent. We can have the assurance that life is more than a string of random acts by looking for patterns of goodness. Finally, we can be the individual who reaches out to make a difference.

A cause for celebration can emerge from almost any tragedy! We can choose to learn…to grow…to improve from the experience. As the lyrics from the musical Wicked point out, through this experience “I have been changed for good.”

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