www.atlantajewishtimes.com
FINANCE
Investing in an Uncertain World
W
e live in uncertain times, and there are many things to worry about domestically and internationally. Remember, there’s never been a time when there wasn’t something to worry about. An amazing 70 percent of Americans think the country is going the wrong direction, helping explain Bernie Sanders and Donald Trump. But in terms of managing your finances, I’m going to try in this article to share some unfortunate truths about investing to help you navigate the markets. I recently read an article that presented 50 bullet points on investing. Here is the list of my favorite missives, including a few of my own: • Most people would be better off if they stopped obsessing about Congress, the Federal Reserve and the president and focused on their own financial mismanagement. • Markets go through at least one big pullback a year and one massive one a decade. It’s just what they do. • Not a single person in the world knows what the market will do in the short run. End of story.
• You don’t understand a big bank’s balance sheet. The people running the place and their accountants don’t either. • There will be seven to 10 recessions over the next 50 years. Don’t act surprised when they come.
Guest Column By Ed Mendel
• Most of what is taught in school about investing is theoretical nonsense. There are few rich professors. • The market doesn’t care what you paid for a stock. Or your house. Or what you think is a fair price. • Most IPOs will burn you. People with more inside information than you want to sell. Think about that. • The low-cost index fund is one of the most useful financial inventions in history. Boring but beautiful. • If you have credit card debt, stop thinking about investing. You will never beat 30 percent annual interest. • However much money you think
you’ll need for retirement, double it. Now you’re closer to reality. • The next recession is never like the last one. • The stock market will never accommodate you. It doesn’t make winners of losers. Never has, never will. • Don’t let a little mistake become disastrous. Manage risk; take losses. Over the years, I’ve dealt with many of the biggest names on Wall Street. I have seen them make and lose fortunes. One of the things I have learned over the years is to be weary of people who make forecasts. As my former partner Ned Davis taught me, the only thing in life that is worse than making a forecast is sticking by it. With this in mind, here are some of the worst forecasts by gurus and pundits in the past two bear markets. Worse Economic Predictions Ever • Ben Bernanke, Jan. 10, 2008 — “The Federal Reserve is currently not forecasting a recession.” • Joseph Cassano, AIG’s head of financial products, 2007 — “It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these credit
default swap transactions.” • Franklin Raines, Fannie Mae CEO, June 10, 2004 — “These subprime assets are so riskless that their capital for holding them should be under 2 percent.” From the 2007-08 Credit Meltdown • Ken Fisher — “This year will end in the plus column … so keep buying.” • Rep. Barney Frank — “Freddie Mac and Fannie Mae are fundamentally sound.” • Barron’s — “Home prices (are) about to bottom.” • Worth — “Emerging markets are the global investor’s safe haven.” • Bernie Madoff — “It’s virtually impossible to violate the rules.” These are some of the things you need to know to invest in an uncertain world. But while we worry about dollars and cents, the important thing in life is to do your best to keep a balance of family, friends and good health. That will make you truly wealthy. ■ Ed Mendel, co-founder of Ned Davis Research Group and Davis, Mendel & Regenstein, is a philanthropist, a limited Atlanta Falcons partner, and a life trustee at the Marcus JCC and Pace Academy.
Can We Do Divorce Better?
T
FEBRUARY 26 ▪ 2016
he “family law system,” as many refer to it, is evolving (think same-sex marriage) and is different in each state and even in each county. Good people across the country are continually trying to improve the system. I hope the energy of those who seek to improve the family law systems across our country continue their good work, helping ensure that families who undergo family law crises (divorces, paternity cases, custody disputes) get through these situations faster and better. The system needs help. But the truth is, the system being used in many places is the same system being used for criminal cases, personal injury cases and the like. That is, many courts handle criminal matters one day, divorce and family law the next day, and other civil suits the next day. And the system (or that particular court) does not work as well for each type of dispute. States or jurisdictions that have 16 family courts understand this situa-
AJT
tion and strive to create systems or processes that work better for families and are separate from the systems that handle criminal matters and personal injury cases. So what is the main difference between litigants in a civil or criminal case and litigants in a family law case? The litigants in a family law case
Guest Column By Randy Kessler rkessler@ksfamilylaw.com
will likely still see each other again and still have some sort of relationship. For this reason, more patience, more alternative dispute resolution and more care are often required. The parties to a family law case are already in trouble. The system should help alleviate or reduce that trouble, not increase it. But ultimately if two adults cannot resolve their differences (about money, children and
possessions), a judge who knows very little about them will do his or her best to figure it out. And that’s a recipe for disaster. No judge can learn all of the facts and make a perfect decision. Yet time and again we see people who prefer to let a judge decide their future rather than keep negotiating. What do I suggest? Let’s support family law litigants and give them every chance to determine their own destiny. Let’s use more mediation, more late case evaluation, more therapy and anything that gives people a chance to resolve their issues. Judges may be great, but they can never understand the entire background and dynamic of the families before them. And they have pressure to make a decision and move on to the next case. Yes, at times there is no choice. There are times when we as family law attorneys do battle and put on the very best case we can and implore the court to grant the relief we think is warranted. But by the time the parties realize that they could have done it better themselves, it is often too late.
So again, my suggestion? Stop, consider, negotiate, mediate, relate, navigate and compromise. Be sure that if you must go to trial in a family law matter, you have done all you can to resolve it privately and amicably. Even if you go to trial, consider what you say in court very carefully. The court case will end, but the memories of what you say in court will not. Your words will resound forever, especially the harsh words. Is that how you want to be remembered? Is that going to make it easier to navigate and resolve your next dispute with that opposing party? End it as peacefully and politely as you can, and you will save yourself much aggravation (and cost) when the next stalemate arises. ■ Randy Kessler is the founding partner of the family law firm Kessler & Solomiany (www.ksfamilylaw.com) in downtown Atlanta, a former chairman of the American Bar Association’s Family Law Section, and the author of “Divorce: Protect Yourself, Your Kids and Your Future.”