At one point in the film
Magnolia (a 1999 Tom Cruise vehicle), the sky opens up and starts
pouring rain. But it wasn't just raindrops falling. It was also frogs.
Yes, frogs. Slimy, croaking frogs. Frogs fell from the sky and
splattered all over sidewalks and roads, causing traffic accidents and
mayhem.
There's a moment in the film when a young boy is reading about
"frogfalls" in a book, even as his house is being pelted with
momentum-charged amphibians. He looks skyward, smiles, and says, "This
is something that happens."
And it is. Frogfalls and fishfalls are extremely rare events, but they
are relatively well documented. In 1995, a woman in driving through a
rainstorm in Scotland reported hundreds of frogs falling from the sky.
Another frogfall was reported in Greece in May 1981. Dozens of similar
events have been reported all over the United States. Though they are
meteorological mysteries, it is thought that frogfalls and fishfalls are
caused by waterspouts or whirlwinds picking up shallow bodies of water
full of unfortunate creatures, carrying them skyward and depositing them
miles away.
Whatever the cause and however rare it may be, it happens. It doesn't
mean the sky is falling. It doesn't mean God is visiting a plague on the
earth. It doesn't mean anything except that frogs can fall from the sky.
Were we to experience an event far less mysterious than a frogfall, one
would tend to shrug it off saying, "Big deal. It's no frogfall."
The general trend of equity markets is that they tend to increase in
price approximately 2/3 of the time. That means that the other 1/3 of
the time, they are either traveling sideways or falling. Not exactly an
amphibian deluge.
Frogs and stock prices do fall. It may not be pleasant, but it happens.
Short term drops in stock prices are much more common than are
frogfalls, but they seem to hit home more because they affect our
self, sorry, I meant net worth.
It is easy to have a high tolerance for risk when the markets are
experiencing their 2/3 fun time of growing. It is much harder to
maintain that tolerance when you see real reductions in your portfolio
value.
Remember, a properly designed portfolio means that some asset is always
going down and something else is always going up delivering a moderated
volatility with an acceptable return.
That's a lot more "normal" than a frogfall.
I don't care if it is the latest thing, this is not how we choose investments.
The links and files contained in this area may give you some
insight or at least information about the types of investments considered
by Financial Counselors of Virginia and why we did so.
Merely the presence of an
investment in any of the lists is certainly not a specific recommendation
for your particular portfolio. These are investments either being researched by
us or held in some clients' accounts.
Some of the investments may be open only
to so-called "qualified investors," or may not be currently
available to new purchasers.
Remember, an individual investment is suitable, or not, only in the context of the portfolio of which it is a part.
We provide a service to our clients that allows the client
and advisor to partner via the Internet to create various Capital Needs Planning
scenarios including advanced Monte Carlo simulations. To access that
service, click here.
The Most Basic Component of Wealth:
Your Attitude
It is much better to be
wealthy than to merely appear wealthy. The now classic work, The
Millionaire Next Door: The Surprising Secrets Of Americas Wealthy is available either in paperback or
Audio CD and is considered required
reading/listening.
Financial Counselors of VA is an independent
Registered Investment Advisor based in Portsmouth, VA, providing
fee-only financial planning services and investment management advice to
individuals and families since 1985.
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