Four useful avenues

I blew my own horns in the second section because I’d like to get readers seriously consider (or at least not dismiss off-hand) how I answer the question posed in the title of this post. What, indeed, one should do now? How to respond to the changed landscape of investing and economy? Should we stay passive, should we escape, with whatever we still have, to assumed safety; should we play bravely on an expected rebound or bet on (and benefit from) further decline, … or what?

In light of the current market turmoil and emerging trends I feel I can more credibly than before claim being a bit more far-sighted, comprehensive / holistic and professional than many others offering seemingly similar services. However, I certainly don’t want to create the impression of any big certainty regarding forecasting. Of course, I hope that I’d score higher than many others in a forecasting contest (it’s probably just human nature), but there is no guarantee for it anywhere.

Some of those who believe and claim to know with certainty what comes next and what is the best action to take will necessarily turn out to be right, while others will be deemed as fools, … in retrospect. Right now, however, nobody can tell who are the future heroes and who are going to be seen as hapless fools. Making no decisions is still not an option for most of us: no action would be a vote for letting things happen to us. Perhaps one of the most difficult aspects of being at peace with our investments or life planning is the deep understanding that there is simply no way of excluding luck as a major factor from our financial matters, … or any other aspects of life, by the way. Once this is accepted, it’s probably easier to be a bit more rational and a better decision maker.

Peter Bernstein, author of Against the Gods: The Remarkable Story of Risk gives some very wise input in this regard in a 13 min conversation

Daniel Gilbert’s dynamic talks also give lots to muse about and learn how we use our brain, how we make decisions, and how we can improve our planning and happiness.

Because of varying individual circumstances, experiences and psychological make up, etc., there is, of course, no uniform answer to the ‘What to do now?’ question. I’d like to offer, and in the following sections explore, four main avenues that can lead to individualized answers:

- Play creatively with widely different planning scenarios

- Examine history of markets and economy

- Consider diversification at a higher level.

- Set out to be more self-reliant

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After weeks of brooding, post was finally published on March 8, 2009