Active Investing Isn’t What You Think

Retirees need to be active investors.

Nothing to do with stock picking. Grandpa shouldn’t be watching TikTok “investment” videos and buying AMC stock or Crypto Currency on margin. Index funds are still the best bet for young and old investors.

My colleague, Ben Carlson, reinforces this concept.

“The biggest threat to long-term returns is your behavior in the short term.” Less is more.

Regarding physical movement, the opposite is true. More is more.

Nothing works financially without this being a big piece of your portfolio.

Money is useless if you’re dead.

We can’t stop the inevitable, but there’s a terrific tool to stall for time.

What’s the secret sauce?

Moving your body.

Ser Davos from The Game of Thrones noted, “Nothing f***s you harder than time.” The best way of mounting a counterattack is mobility.

It’s not all our fault. Don’t judge what you don’t understand.

Natural Selection favors energy conservation for our main purpose – reproduction of the species.

Running on a treadmill or riding a bike to nowhere goes against our basic instincts. Neanderthals didn’t go to Saturday Morning Cross-Fit. They didn’t have to.

This made a ton of sense when we lived in small groups surviving as hunter-gatherers. Our daily routine consisted of much walking and sometimes running for our lives. Needless to say. Observing a fat hunter-gatherer is the ultimate Black Swan.

Modern society is nothing like living in a Savannah. Sitting in front of a computer chowing down on Doritos isn’t the same as digging for tubers or smoking out bee-hives to find honey in the equatorial heat.

We’re still wired to conserve energy even though modern life makes this a terrible survival strategy.

Why are humans geared for longevity when most creatures die soon after their reproductive years end?

We can trace this to our past.

Daniel Lieberman explains. “Instead of becoming obsolete, middle-aged and elderly hunter-gatherers bolster their reproductive success by provisioning children and grandchildren, doing child care, processing food, passing on expertise, and otherwise helping younger generations. once this novel cooperative strategy started to emerge during the sone Age, natural selection had a chance to select for longevity.” 

We moved, and we lived.

Transplanting to Florida, sitting by the pool, and riding around in golf carts interferes with this process. Incessantly watching political programming and listening to talk radio makes your world smaller, angrier, and your life shorter.

Becoming a prisoner of your own illusions is no way to spend your time.

There are healthy alternatives.

Playing with your grandkids and having a consistent exercise program fools the body into thinking your back in the Stone Age.

Nothing fancy is needed. A simple walking program works.

Source: The Guardian

Lieberman goes on. “Middle-aged and elderly hunter-gatherers never had the opportunity to retire and kick up their heels. There was never a strong selection to turn on these mechanisms to the same degree without the stresses caused by physical activity.” 

The shadow of death casts its net far and wide. We can’t escape this fact.

The good news is physical activity slows down the rate of encroachment.

The answer to the active vs. passive debate regarding health is a no-brainer.

Active wins by a landslide.

Too much activity in your portfolio is another matter.

Confusing the two isn’t recommended.

Source: Exercised by Daniel E. Lieberman