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Balancing Act The reasonable man adapts himself to the world. — George Bernard Shaw I find Chinese restaurant menus frustrating. There are dozens of items from which to choose, and I don’t have a clue what some of them are. They may be delicious, but I tend to avoid them for fear I’ll end up with something I consider to be inedible, or worse, revolting. It can happen. Once when my wife and I were visiting San Francisco, we went to an internationally famous restaurant that was highly praised for its dim sum. Waiters moved among the tables with large carts, each of which held three covered serving dishes. We noticed that only some of the carts were brought to our table. Many passed by, stopping only at tables where the diners were Chinese. |
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I called to the waiter who was pushing one of those carts and motioned him over. After all, we were in San Francisco’s Chinatown, and we wanted to experience the best it had to offer. The waiter shook his head, but I insisted. Finally, he reluctantly brought the cart over. He didn’t speak much English, so I pointed to one of the covered dishes and indicated we wanted some of whatever was inside. He frowned and tried once again to say no, but I pointed more vigorously. Finally, he removed the cover and we found ourselves staring at a bowl filled with steamed chicken feet. Scrawny, yellow, and, to us, decidedly unappetizing chicken feet. He moved to pile some on my plate, at which point I shook my head vigorously and motioned him away. With a shrug and just the hint of a smile, he replaced the lid and moved off to another table. That’s why, to this day, my wife and I hesitate to order unknown dishes from Chinese menus. I’m telling this story because in chapter 15 I set out a lengthy list of menu items for possible inclusion in a Sleep-Easy investment portfolio. Some of those items may not be familiar to you, and you may hesitate to try them as a result. Fair enough. You don’t need to use all of them; in fact, some of the choices will be unsuitable in certain situations. What you must decide is which ones you do want to include and the weighting to give each in your portfolio. Before you begin choosing from my menu, you must prepare a master plan for asset allocation. Most investors are more concerned with trying to pick individual securities than they are with ensuring that their asset mix is right for their goals and temperament. That’s putting the cart before the horse. Asset allocation should be the first step. Once you know how you want to structure your portfolio, you can concentrate on selecting the best securities. But put first things first. Proper asset allocation is the cornerstone of smart investing. Repeated studies have shown that having the right mix is more important to your total return than the individual securities you choose. | |||