Jonathan Clements

WE DON’T PURSUE MONEY just to put food on the table and a roof over our head. Instead, the hope is to enhance our life. On that score, it seems we aren’t doing terribly well: Our reported level of happiness is no higher than it was half a century ago.
Could we do better? I believe so. There’s been extensive research on happiness in recent decades. For those who want to dig into the details,

“NICE OFFICES,” OFFERED the 30-something investor, as he cast a wary eye across the corporate art, barren desks and empty bookshelves.
“Yeah, we asked management if they could put us on the 12th floor, so our suite number could be 12b-1. Funny, right?” The financial salesman winked.
“Not sure I get it.”
“It’s a joke, but clients never get it, they pay it.”
“What qualifications do you have?”
“See those initials after my name?

IT’S INDEPENDENCE Day. But how truly independent are we, both financially and in our thinking? The two, I believe, are inextricably entwined.
Whether it’s the TV shows we watch, the political views we hold or the investments we buy, we often take our cues from family, friends and colleagues. They, in turn, may be influenced by advertising and the media. But however ideas get spread, the result is that most of us aren’t the fiercely independent thinkers we imagine.

YOU KNOW THOSE timeless financial principles? Sometimes they don’t age so well.
Since I started writing about money in 1985, all kinds of financial principles have gone out the window—and that’s continued right up until 2020. Indeed, if you’re still hewing to the financial wisdom of the 1980s, you’re likely hurting yourself today. Here are four examples:
1. Goodbye, Peter. In the late 1980s, America’s most celebrated fund manager was Fidelity Magellan’s Peter Lynch.

WE ALL WANT THE GOOD life, though we’d likely differ on what exactly that is. Still, our wish list might include things like meaningful work, a robust network of friends and family, minimal money worries, service to others, good health, a long life, and a sense of both serenity and purpose.
What stands in our way? As we strive to make the most of the limited time we’re given, it’s worth pondering how we’re constrained and what we can do to improve our lot.

THEY’VE LONG BEEN endangered, but 2020 may mark their demise: After four decades of falling interest rates, it seems safe investments offering attractive yields have finally disappeared.
At 0.7%, the payout on 10-year Treasury notes is below the 1.2% expected inflation rate for the next decade. High-quality corporate and municipal bonds offer more generous after-tax income, but hardly enough to excite investors. In the years ahead, the yield-obsessed will no doubt turn to riskier fare—high-dividend stocks,

DOES OUR PERSONALITY help determine our financial success? It seems it does, or so says academic research.
Psychologists have zeroed in on five key personality traits: extraversion, conscientiousness, agreeableness, neuroticism and openness to experiences. Think of each trait as a spectrum from, say, very conscientious to not at all. Each of us sits somewhere on the five spectrums. Maybe we’re a bit of an extravert, somewhat inclined toward neuroticism, and extremely open to new experiences and ideas.

WHEN I WAS A TEENAGER and bathroom walls were the equivalent of today’s Twitter, you’d often read that “100,000 lemmings can’t be wrong.”
It turns out that the bathroom scribblers were misinformed and that lemmings aren’t, in fact, given to mass suicide. Still, the scribblers’ confidence in the wisdom of crowds was spot on. If 100,000 lemmings did indeed commit mass suicide, there would likely be a good reason.
Which brings us to today’s stock market.

IT’S BEEN AN UNHAPPY few months. Stepping outside means risking our health. One out of six U.S. workers is unemployed or soon will be. The stock market has suffered its worst decline since 2007-09. And while we can take steps to help ourselves, the situation is largely out of our control.
Feeling glum? One of my abiding interests is happiness research, and that research offers ideas that can make our current situation a little cheerier.

THIS SHALL PASS—just not as quickly as any of us would like.
I’m talking about the bear market, but the same sentiment applies to both the coronavirus and the economic slowdown. Indeed, the three are inextricably entwined, with share prices the twitchy indicator that tells us the mood of the moment.
Amid the swirl of news—the latest fatality count, the unemployment claims, the Dow’s daily action—it’s easy to get unnerved and start second-guessing our investment strategy.

IT’S A SCARY TIME to own stocks. But for long-term investors who want their portfolio to clock significant gains, there’s simply no alternative.
To be sure, you could throw in your lot with the market-timing crowd, who are currently hiding out in bonds and cash investments. Their plan: When we get the final climactic plunge in share prices that sends the market back to valuations not seen in four decades, they’ll swap into stocks and ride the next bull market to astonishing wealth.

ON WALL STREET, there’s a story—apocryphal, I suspect—that’s told about an old trader, a young trader and the 1962 Cuban missile crisis.
Old trader: “They say this could lead to nuclear war.”
Young trader: “So we should buy bonds, right?”
Old trader: “No, we should buy stocks. If we don’t get war, the stock market will rally. And if we get a nuclear war, it won’t matter what we own.”
Today’s pandemic won’t lead to nuclear war (except perhaps in the Oliver Stone movie version).

WE’RE IN THE MIDST of a bull market—in talking. Stuck at home with our families, we’re chatting more with each other, while also frequently touching base with friends and family whom we can’t see in person.
How about devoting some of these conversations to money?
I’m not going to claim that, if we had more frank discussions about money, it would solve all of our financial problems. I’ve seen enough damning data and heard enough horror stories to know that many folks will make huge blunders,

INVESTING IS A GAME of subtraction—and I’m not talking about this year’s stock market decline.
Wall Street sells the fantasy of market-beating returns, using it to seduce investors into adding new stocks and funds to their holdings. Result? Performance-chasing investors cobble together badly diversified portfolios that they imagine will beat the market, while overlooking the hefty costs that Wall Street charges. This is a strategy that’s almost guaranteed to make heaps of money—for brokerage firms and money managers.

GOT QUESTIONS? WE’VE got answers. This week, a new chapter was added to HumbleDollar’s online money guide. The chapter’s goal: to tackle basic financial questions that often crop up, especially among those new to the world of investing and personal finance.
This might seem like an iffy moment to make financial changes. I’d argue just the opposite is true. With the stock market down sharply, this is a great time to get started as an investor.