Do you like exotic food?
Grilled bananas in a Thai market. Photo: Igor Ovsyannykov. Source: Fancycrave.
My family and I recently watched “Crazy Rich Asians,” a romantic comedy set in Singapore. One of the early scenes was of two couples enjoying “street food,” where Chinese, Indian, Malay, and other chefs set up their food carts and people eat in an open-air market. Singapore’s street food is world famous, and some of its food cart chefs have earned awards usually reserved for gourmet chefs.
You need to have an adventurous palate, though, to enjoy this sort of experience. Rice cakes soaked in coconut milk, jam made from tropical leaves, soya chicken rice, and wok fried prawn noodles are typical. If just want hot dogs and hamburgers, hawker fare isn’t the best place to find it.
I used to love new foods and new experiences. But in the last year or so, my body hasn’t been as thrilled as I have with some of my choices. I indigestion now if I get too bold or daring. I used to people were missing out if they restricted their palates to a narrow range, but now I understand that sometimes that’s a more prudent approach.
Investing is the same way. What works for a young couple in their ‘20s might not be appropriate for the same couple in their ‘70s. One of the most important limitations investors need to think about is our time horizon. We may all think we’re going to live forever and our culture may celebrate youth, but it’s foolish to plan that way. There are broad seasons in our lives: preparation, production, provision, and protection. Our investments should follow the same pattern. Someone who is about to retire can’t tolerate the same level of risk that they could when they were just starting out.
Of course, you can’t fit people into a cookie cutter and say, “What you need is a standard XX-year old investment allocation.” That would be as silly as bringing a daughter to a shoe store and asking for “8-year girl shoes.” There are all kinds of factors to consider when planning our budgets, spending, saving, and investments. But surely, where we are in our personal life-cycle should be central to any sensible financial plan.
Photo: Victor Hancek. Source: Picjumbo
And if we’re careful, we can be adventurous without getting indigestion.
Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”