Health And Wealth Resolutions For 2013

If weight loss is one of your New Year’s resolutions (and it almost always is for quite a few of us after the triple whammy of the Thanksgiving, Christmas and New Year’s holidays), here’s a handy tip: A team of international scientists, analyzing recent health data from more than 25,600 U.S. survey participants, concluded that people who read food labels weigh less than those who don’t (this is especially true of women participants, who averaged nearly 9 pounds less).

I would argue that you need to know what to look for on a food label.  “Natural” “healthy” “cholesterol-free” are, in my opinion, meaningless.  Depending on your goals and specific diet, “wheat-free”  “soy-free” and “dairy-free” may be important.  And once again in my opinion, the amount of sugar (and the carbohydrates which convert to sugar in the body) in any food is extremely important. 

You’re probably asking yourself what has food got to do with finance?  The answer is all about information and interpretation.

What you need: Your investment experience is greatly improved by a sound philosophy and consistent exposure to meaningful facts. For example, in 2012 despite continued global economic uncertainty and political gridlock, stocks quietly rewarded patient investors with double-digit gains. Not too shabby after all for a stay-the-course investor, an approach we have consistently advocated.  Investors who believed the negative headlines and pulled their money out of equities into safer havens suffered accordingly.

What you get: Slick advertising showcases a product’s most appealing features. If they’re there at all, the blemishes and boring but very important details for the long-term investor are buried in the fine print.  Just as understanding metabolism is important for weight control, knowledge of how markets and investments work is key to a successful investing strategy.

What counts: There is a reason the Securities and Exchange Commission makes sellers of investments say that “Past performance is not a guarantee of future results.”  Why?  Because it is true.  Why then do so many investors pay attention to the Morningstar ratings of mutual funds?  Those much ballyhooed Morningstar Star ratings are based on past performance. 

What you must know: There’s no law in our free market system against promoting what’s popular, irrespective of how bad it might be for you. It’s up to you, not the product provider, to make informed choices that are in your best interests.  Understanding fee structures and tax implications are up to you (or your objective investment advisor).

How we help: We live in a world of up-and-down markets in which useful financial disclosures are often opaque to non-existent; and the next upset — the next fiscal cliff or its economy-busting equivalent — seems to forever threaten our best-laid plans.

About the author

Roger Streit, CFP®

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