The Last Word on Investing

     There's nothing like a deathbed confession to get at the truth. Gordon Murray, a former Wall Street investment banker, is dying of brain cancer. He was diagnosed with cancer in 2008, and when a brain scan uncovered a new tumor earlier this year, he decided against an aggressive medical response. Now, as a last professional act, he has had the courage to step forward and write a book admitting that for most of his Wall Street career he was peddling snake oil.

Goldie (left) and Murray

     The book is called The Investment Answer, co-written with former professional tennis player Daniel Goldie, who also happens to have an AB in economics from Stanford and an MBA from University of California at Berkeley. Murray himself earned an AB in political science from University of North Carolina and an MBA from Columbia.

     In the book Murray reveals that all those mutual fund managers and investment gurus who claim they can beat the market averages, and deliver you a superior investment performance, are selling you a bunch of baloney. What they're really doing is collecting extra fees while producing mediocre results -- because they're not working long hours to improve your financial position, they're spending all that time figuring out how to charge you higher fees and make more money for themselves.

     The advice in this slim 70-some-page volume boils down to a few basic tenets:

     1) If you hire a personal investment adviser, make sure they earn their fees from you, not from the companies whose products they're selling.

     2) Separate your money into different piles -- a pile for stocks and a pile for bonds. Then subdivide those piles into big and small companies, value and growth companies, foreign and domestic stocks and bonds.

     3) Invest each of those piles in a passive, or index, mutual fund that focuses on the appropriate subsector. These are available at Vanguard and other low-cost fund families. Since no one can predict the future, insists Murray, there is no point in paying an active manager to try to do it.

     4) Rebalance your portfolio on a regular basis. (Once a year, for example.) Sell some of your winnings; buy more of the worst performing investments. This is counterintuitive, but crucial to long-term performance.

     With this simple approach, according to Murray and Goldie, you will secure your financial future for years to come. And if you think you can score higher returns you're probably kidding yourself -- unless, maybe, possibly if you studied business theory at a place like Stanford or Columbia and spent more than 25 years swimming with the sharks on Wall Street.

Billy Joel Gets Hip

     Famed pop singer Billy Joel, 61, is really hip now. The Rock and Roll Hall of Famer -- creator of 1970s megahits "Piano Man," and "New York State of Mind," and baby boom anthem "We Didn't Start the Fire" (1989), and who last year went out on tour with Elton John -- checked into the hospital for double hip replacement surgery over the Thanksgiving holiday.

     Hip replacement is a common procedure these days, especially for people over 50, and it's judged to be an operation that produces spectacular results. A friend of B's had both her hips replaced last year. She claims it changed her life. There was no more pain, which offered her greater mobility, which in turn gave her more self-confidence. The whole experience also motivated the friend to lose about 40 pounds, and since she was 50 or 60 pounds overweight, that was a good thing for her.

     The hip is a ball and socket joint. The ball at the upper end of the femur (thigh) bone fits into a socket at the bottom of the pelvis. Cartilage around the end of the bones normally cushions the joint, providing easy, pain-free movement. For any number of reasons -- injury, arthritis, genetic predisposition -- the joint can become inflamed, the cartilage wears away, and you begin to experience pain and stiffness. People with long legs are prone to hip problems. So are people who are overweight.

     Treatment for a hip problem starts with losing weight, doing flexibility exercises, and taking anti-inflammatory pain relievers such as Advil (a brand of ibuprofen). Hip replacement is an option if less invasive strategies don't work. The surgeon switches out the damaged ball at the top of your femur with a metal or ceramic ball, and replaces the damaged socket in your pelvis with a metal or ceramic socket. If both hips are damaged, they can be done at the same time, called bilateral hip replacement.

     The internet offers plenty more information on hip replacement. Sinai Hospital is a good place to start.

     Meantime, Billy Joel is said to be doing well and is expected to return to his Long Island home by the end of the weekend. But judging by recent photos, he could lose a few pounds. If he does, maybe he'll do as well as B's friend. And he'll soon be back on the road with Elton John.

What's This Blog About?

     I recently turned 60. Okay,okay, thanks for the condolences. But crossing this milestone has made me realize a few things. Traditionally (like for my parents and the parents of my friends) this stage of life was a quiet, settled time. Your family was established, your job secure, your future all mapped out.

     But things are different now. Your 50s are more likely to be a transitional decade. You might have a new spouse, a new home, a new job. Retirement is on the horizon -- and may come sooner than you think. You may be dealing with life-altering health issues, while still parenting grown-up children or taking care of elderly parents.

     The decisions you make in your 50s and 60s not only affect your current way of life, but profoundly influence the lifestyle you will enjoy -- or endure -- when you’re in your 70s and 80s. Your body now has less tolerance for abuse. If you take care of yourself you feel fine. But if you eat junk food, or drink too much or try to cheat on your sleep -- oh man, you really suffer the consequences. Meanwhile, medicine offers new tools to find and fix health problems. If caught early many situations will respond to treatment before they break out into life-threatening illnesses. But guess what. First you have to go to the doctor!

     You’re like a car with 75,000 miles on it. Take care of it, bring it in for an oil change and new belts and tires, and it will chug along for another 75,000 miles. But if you don’t, you’ll be coughing and belching to the junkyard before you know it.

     Financial questions loom large as you near retirement. What are you going to do without a paycheck? Few people can count on a pension anymore -- the very concept has the gloss of nostalgia to it -- and Social Security seems kind of shaky these days. The responsibility to pay for retirement has been transferred from your employer to you as an individual. The financial moves you make in your 50s and 60s can set the stage for a comfortable and dignified retirement -- or struggling along on a shoestring and depending on the kindness of others. Your retirement could last 20 or 30 years. Do you want to spend all that time worrying about when, or if, Social Security will send the check?

 

     At the same time, people at this stage of life enjoy more freedom and choice than any group of pentagenarians or sexagenarians in history. Second careers are born. New friendships are found. New relationships are formed. The kids are grown up and becoming independent, relieving you of parental responsibilities.

     I'm using this blog to take a sighting of where I stand at this stage of life, and to help me plot a course for the next decisive years. I don't have any more particular career goals. But I have expectations for my kids. I still want to live long and prosper. And I hope the blog will also provide a forum for ideas and suggestions to help other people map out their futures. Because we could all use some advice, some guidance and a little help from our friends.

The '60s Live Forever in Ads

     There is big news in the music business. Songs from the Beatles are finally available on iTunes!

     The Beatles? Didn't they break up 40 years ago? Think about it. People getting excited about the Beatles in 2010 is like kids in the '60s getting all wound up because Al Jolson croonings were coming out on 45 r.p.m. Nothing against Al Jolson. I'm sure a few oldsters, as well as some music aficionados, listened to Al Jolson in the 1960s. But he was buried in history. The Beatles are still relevant in 2010. And so are many of the bands we grew up with in the 1960s and early '70s.

     Not convinced? Ask the advertising world. Just this past weekend I saw a Honda ad on TV. The background music is Simon & Garfunkel's "The Only Living Boy in New York" from their 1970 album Bridge Over Troubled Water.

     There's a Kellogg's cereal ad out now using the 1968 bubblegum tune "Yummy, Yummy, Yummy" by The Ohio Express.

     Roberta Flack sings her 1972 song "The First Time Ever I Saw Your Face" for the ASPCA.

     An HP printing commercial features "Brand New Key", a 1971 ditty by folksinger Melanie.

     Not to mention Beatles songs themselves which have been used recently -- "Come Together" for Macy's, "Hello, Goodbye" for a phone company, "Revolution" for several ad campaigns.

     There are plenty more, too. Would love to hear about other sightings.

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Inflation: Lying Low, or a Big Lie?

     The federal government released its inflation numbers last week, showing that over the past 12 months the overall Consumer Price Index went up by only 1.2 percent and the Core Price Index (which excludes food and energy) increased by a scant 0.6 percent. Less than one percent in a year. Most (not all) experts agree that inflation levels in the U. S. are at their lowest levels in more than 50 years. Because of that, for the second year in a row, retired people will see no increase in Social Security payments.

     But reading inflation reports gives me a major case of cognitive dissonance. The government tells me there's no inflation. But, somehow, my bills keep going up! And it's not because I'm buying more stuff. It's because prices keep rising, especially for the biggest items in my budget.

     My biggest bill goes for college tuition for my daughter. She gets some loans and a small scholarship, but I pay most of it. For the fall semester her tuition increased 5.7 percent.

     The second largest bill is my real estate tax. This year it went up less than usual. But it still rose 1.8 percent, and that's 50 percent higher than the CPI and three times the core rate.

     My third largest bill goes for medical insurance. My last rate increase swelled up by an alarming 17.3 percent.

     Prices for a lot of other things seem to cancel each other out. The electric bill perked up a little; the heating bill simmered down a little. Prices at the grocery store are up. Prices for computers are down. Maybe if I ate less, and bought more electronic doodads, my cost of living would match up more closely with what the government tells me.

     Am I crazy? Am I imagining things? What about you? Is your inflation rate 0.6 percent? Or do you have a case of cognitive dissonance like I do?
 

Paul Volcker's Advice for Your Children

     It's the best advice I've heard in a long time, some out-of-the-box thinking. I ran across it last year when I drove up to Schenectady, NY, to attend graduation at Union College. B's older son was getting his diploma. (B is my significant other.)

Paul Volcker, 83, still has sharp instincts

     The speaker was former Federal Reserve Chairman Paul Volcker, who told these young hopefuls:  Go to Africa, and learn Chinese.

     Africa, he told them, is the next big thing -- with a wealth of natural resources, governments finally maturing into stable democracies, and a young population eager to join in the social and scientific progress of the 21st century. And it's the Chinese who have recognized this opportunity. They have sent thousands of engineers, businessmen and government officials over to Africa to develop raw materials and expand new markets.

     I'd venture to say that very few, if any, of the Union College graduates followed Volcker's advice. To their detriment. From what I know of those graduates, most of them are unemployed, or underemployed, living at home and suffering from a comatose American job market.

     I also thought -- the parents of these college graduates might also benefit from Volcker's suggestion. A 2006 study from the Journal of the American Medical Association showed that performing mental exercises, memorizing information and learning new material can help older adults retain and improve their mental capacity. What better way than to travel to distant lands and learn about new peoples and cultures? And maybe learn a little bit of the language before you go!

      Oh, there is one other thing to tell your kids:  Eat your vegetables! That comes from my mom. She's pretty smart, too. What's the best piece of advice you've ever heard?

Who Gets Carpal Tunnel Syndrome?

     I always thought Carpal Tunnel Syndrome was just a way for people to complain about their everyday aches and pains. Until I got it.

     I was diagnosed after a hand injury which involved some minor surgery and subsequent swelling in my hand and wrist. This is what brought on the Carpal Tunnel Syndrome, known in the medical biz. as CTS. But when the therapist described the symptoms to me, I instantly recognized that I'd been showing signs of CTS for years.

     The symptoms:  tingling or numbness in your thumb, forefinger, middle finger and the inside of your ring finger. But not the outside of the ring finger, or the pinkie finger. The problem typically starts at night, then as symptoms progress they affect you during the day. Symptoms can spread to the palm of your hand and even radiate up the arm. Do you find yourself shaking your hand and arm to get rid of pins and needles? You might have CTS.

     The problem:  It's the median nerve. This nerve runs through a narrow tunnel along the inside of your wrist. If the nerve or surrounding tissue swell up, then the nerve gets pinched resulting in pain and numbness. The swelling is often caused by making repetitive movements over a long period of time -- such as typing on a keyboard for six or eight hours a day for 10 or 20 years. CTS is associated with age (of course), as well as injury and certain diseases such as arthritis and diabetes.

     The solution:  The first thing to do is stop performing the repetitive motion that caused the problem in the first place. Sometimes wearing a wrist split at night can mitigate symptoms. Anti-inflammatory drugs such as Advil, Motrin or Alleve can help with the pain and swelling.

     If home remedies don't work, a doctor can give you a steroid injection, which is most effective in alleviating a sudden flare-up. Surgery is the last option. The surgeon makes a two-inch incision into your wrist, cuts into the ligament and -- presto! -- your problem is solved. Or so I'm told.

     I've had my steroid injection. I hope it works, because the next step is surgery. I've talked to several people who've had the operation. They claim it's not bad at all. Recovery time is pretty quick; you don't have to wear a cast or splint; and the operation usually works.

     All that is fine. But I'm still hoping it will go away by itself.

Goodbye to an Unmarried Woman

     The actress Jill Clayburgh died a week ago, on Nov. 5, at the age of 66, after battling chronic leukemia for more than 20 years. She is survived by her husband, playwright David Rabe, and two children.

  
     I'm kind of surprised at how little attention this sad moment received in the press. In the late 1970s, Clayburgh embodied the hopes and dreams and fears of American women first in An Unmarried Woman then in Starting Over. Anyone who captures their times so perfectly, so purely, should be remembered for their contribution to our lives. Check out her dance from An Unmarried Woman.

     Clayburgh went on to act in several more movies, and she appeared on TV in "Law and Order," "The Practice," and "Nip/Tuck." In addition to two Academy Award nominations as Best Actress for An Unmarried Woman and Starting Over (she lost out to Jane Fonda for Coming Home in 1979 and Sally Field for Norma Rae in 1980) she was also nominated for a couple of Emmys and several Golden Globe Awards. In 1999 Entertainment Weekly chose her as one of Hollywood's 25 greatest actresses.

     You can see her daughter Lily Rabe on Broadway, as Portia in Merchant of Venice, starring one-time Jill Clayburgh beau Al Pacino.

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Men and Women -- A Difference of Opinion

     This is kind of interesting . . . A 2009 study shows that when a single woman encounters a new man she looks at him for a longer period of time than a typical married woman does. But men, whether married or not, take about the same amount to time to size up a woman.
   
      Researchers at the Kinsey Institute at Indiana University asked more than 50 men and women to analyze photos of people they did not know. The volunteers were all heterosexual, from a variety of ethnic backgrounds. About half of them were single; half in a committed relationship. The volunteers were asked to rate the photos for attractiveness. Single women and married women basically agreed with one another on how attractive the men were. The difference was that the single women looked at the photos for a noticeably longer period of time than the married women did. But the men, married or not, looked at the photos for approximately the same amount of time.

     If the male considered a woman unattractive, he looked at the photo for 4.5 seconds. If he considered a woman attractive, he looked at the photo for 8.2 seconds. It didn't matter whether he was married or not. Women had a different response. They looked at all the photos for about the same amount of time. It's just that single women lingered over the photos longer than those who were in a committed relationship.

     As Chris Rock might say -- Maybe it isn't right; but I understand.