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Water, Salt, Sand Rats, and Your Portfolio

Investing and financial planning is like nutrition and your diet

French fries

The attached eMoney article, written by a medical professor from the University of Colorado Anschutz Medical Campus, discusses two overlooked causes of weight gain that leads to obesity.

Health and forming good nutritional habits are important, so the article resonated with me. It also made me think of the similarities between a good diet and a good financial plan.

A good eating plan takes a comprehensive approach to balancing proper food groups and eliminating unhealthy, engineered food. A good financial plan also starts by focusing on an intelligent asset allocation framework with appropriate exposures. We do not want to over-indulge on any particular asset class nor exclude one that may provide a benefit, even if it is something we are unfamiliar with.

There is no need to get overly complex. Simple, less-exotic solutions are usually best. Drink more water. Save more. Avoid bad ingredients. Do not take excessive risk. Be wary of fad diets and foods with myopic health claims. Be cynical about esoteric financial products with high fees, complex structures, are difficult to comprehend, and aggressively marketed.

The details of a healthy diet and a proper financial plan can look different for different people (just like the sand rat example from the article). Both can be, and should be, customized for each situation.

We need to understand how it all fits together. Correlations are important in the investment world. So too, are the combinations of food we eat. Within a portfolio, we seek to balance risk and returns and hold securities with differing characteristics. Certain foods are either very good together or very bad together. Understanding how things interact will lead to better outcomes.

Success in health and financial planning both take time. Shortcuts and quick fixes undermine our ability to reach long-term goals. Both are a process that compounds from doing positive things over time. Both require focus and resisting temptations. There will be bad points along the journey that will be difficult. Both are also easier with a partner and support network.

Read the article below for more information. If you are struggling with your diet or financial plan, please seek advice from a professional.

2022-08-25 Two surprising reasons behind the obesity epidemic
Download PDF • 349KB

This content was created by a third party. All opinions, comments, conclusions are of the author and not Jackson Creek Investment Advisors LLC. The information published herein is provided for informational purposes only and does not constitute an offer of investment advisory services. All information is subject to change without notice. Nothing contained herein constitutes financial, legal, tax, or other advice. These opinions may not fit to your risk and return preferences. Investment recommendations may change, and readers are urged to check with their investment advisors before making any investment decisions. Information provided is obtained from sources believed to be reliable, but we cannot attest to its accuracy. Past performance is not necessarily indicative of future returns. Investment advisory services are offered through Jackson Creek Investment Advisors LLC, a Registered Investment Adviser.



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