Diversification and Asset Classes by Economic Strata

 Let me start by saying I am just writing for my own clarification. This is not advice. I'm not qualified really to handle my own investments, never mind advice anyone else. For clarity, get your advice from a professional.  This is just me noodling.

The foundation of investment strategy is diversification both within and between asset classes. It's not finding hot investments, that's gambling. Investing for non-professionals is best done (per Swanson and tons of other smart investment advisors) by picking the right diversification strategy and then some low cost well run index funds (Swanson swears by non-profit investment mutual funds but he wrote prior to the super low cost index funds)

Simple: for people with some wealth. Let's say $100,000 to $1,000,000.  The truism for these people is to balance equity and debt. If you are younger and saving long term, tilt heavily towards equities. Maybe 80%. Maybe more.  Inside the equity pool, focus on index funds.  Get a selection of obvious ones perhaps mostly the US equity market (S&P500, perhaps VOO) and a smaller percentage in global developed (EAFE: non-North America public equities) or emerging (don't have an example).  The S&P index fund probably has all the diversification you could need. If you'd like you can subdivide the sectors; Example, you can distinguish between growth investing and value investing (what index vs what index) but I'm not sure there are great index funds that make creating this distinction worthwhile. For debt, it's tricky in the modern world since T bills pay basically nothing.  And while everyone agrees that in the future, there will be an interest rate, the problem with holding T bills now is that as the interest rate reinstates itself, the value of existing T bills will shrink. So, is there any value at this point in holding debt? Why not simply a money market fund?

Complicated. People with more wealth and who want to generate enough cash to live on. Retirees. $1 - $5M in total portfolio savings including IRAs and 401Ks. This is a huge group. Boomers largely watched fixed income retirement plans disappear (in the 70s-2000) to be replaced with 401Ks and IRAs so retirement became largely self financed, not counting social security which helps but for professionals with a certain life-style, it's not nearly enough.. This means that there are tons of couples who have millions in retirement savings and are trying to figure out if they can live on that. Many would like to live off the income from these savings so that they can pass it on to their children. For these people, how should they be invested. How should these people think about diversification?

Wealthy People. A third category would be people who have enough wealth (over $5M right up to 10x that) so they can invest in some number of totally illiquid investments with a longer term perspective with higher risk/return ratios.  How should they think about diversification across asset classes on criteria such as:

-    liquid vs illiquid
-    debt vs equity
-    domestic vs international vs emerging
-    real estate vs corporate
-    sectors such as agriculture, tech, etc
-    growth vs value
-    income vs growth

Related points for these people are tax and estate planning.
There are some pretty good articles that I can find on the first category, a few on the second, but I can't find a single good article on this third category in terms of diversification strategy.

Small Business PR

 For many years, I invested almost nothing in PR. Then, at one point about five years ago (maybe around 2015), I thought about using PR to simplify our hiring. After that, with the pandemic, homeschooling became big news.

Local PR for Local Hiring - This worked pretty well. I made a point of speaking at the local business groups where the marketing and engineering types that we were interested in would see our name. I also personally did some PR and even local advertising to support this. We took some billboards and put some ads on NPR (our local affiliate is WLRN).  I spoke at some business promotion groups locally giving a speech up at FAU (organized by the Ten Golden Rules guy), a talk at Citrix organized by <what's the name of htat group?>, and so on (I never spoke at SFIMA nor at ??? the directo marketing group) etc etc. I got stories in local blogs, newsletters, Ft Lauderdale Biz News,  and Ft Lauderdale Sun Sentinel.  Plus tons of social media..

Pandemic Time: Homeschooling is Big News: By April 2020, we had decided that we could contribute to the national discussions and hired a PR firm. We hired and I started doing press. Generally, I pushed for focusing on using moms local to the news story which everyone agreed with as more engaging and convincing.  I tried to remain in reserve to use when they wanted a business talking head. Generally, the campaign seemed successful with three big caveats.

1. Me as a talking head spokesperson. While I'm comfortable with a live audience as a speaker, I'm awkward with a camera and a soundbite. Despite good training by the PR team, I seem to have a crooked smile, a shifty gaze (glancing at my script or notes), and to be long-winded.  I'm working on it. In response to a request for a few minute speech, I just developed a new recording style in which I simply write myself a list of points. And each point is a separate take (entrepreneur talk on 5 points). This solves the "speech" problem but doesn't address interviews. I wish I had thought of it when I got to give the Time4Learning Graduation Celebration speech (my part starts at minute 36).
2. National Press. We've only succeed with the regional stories and had a paid insert in USA today and a huge run with one AP Press story. But mostly, we've gotten coverage in regional press especially in South Florida. If our goal is press for SEO purposes, this is pretty good.
3. Impact? While the agency makes a good point of routinely documenting that hundreds of thousands or millions of people are exposed to these stories and our name, I've seen no evidence that it helps our business in terms of name recognition, stimulating follow-up by potential customers, or selling customers.  We recently cut a sponsorship of a TV program (The Cat in the Hat Knows a Lot About That) since while the numbers of people who saw our initial 20 second blip was huge, it seemed to have no measurable impact anywhere after six months.  While the PR effort for exposure is cheaper in terms of total monthly cash, it's also a ton more work. One added bonus however has been very useful work and thinking from the PR firm where thy function also as a marketing agency helping with message refinement and projects.
1. Anecdotally. I never hear from anyone that they have seen our stuff. I know people everywhere so this seems weird. Especially since I know tons of people in SoFlo.  Is old media just dead?
2. None of our marketing tracking tools have shown any surges related to where the stories ran.
3. Our SEO team has not shown that the additional links and citations have been picked up, recognized, or counted by the search engines.
4. Even in social media, while I see mentions by our team, they have never seemed to have any real momentum and get large numbers of links or shares. Is there a way to spin these stories to our audience which might encourage them to share the story. Many parents talk about other family members or community's skepticism about their homeschooling direction, could we write and share a link to these stories in a way that would get shared?
4. The PR effort is very much a traditionally media focus. Except for a podcast (which had a tiny audience), it's focused on TV, radio, and newspapers. It's not designed to get big coverage from online websites or social media. Does PR of that sort exist?  Or does that really just mean doing paid work with influencers. We use to work with bloggers very effectively, both large and small. Recently, I haven't seen any real focus or success on it.

The Comfort Zone and Learning

 I'm reading a book called License to Learn by Anna Switzer.  It's a great interesting book that blends personal experience with academic thinking and the learning sciences with some psychology. Pretty ambitious, illuminating, and engaging.

  To be honest, the first chapters annoyed me at their simplicity and the way that illustrative graphics were being used.  My complaints:

- the image of a comfort zone surrounded by a discomfort zone and then a panic zone seemed overly simplistic (I'm using different terms that were probably used in the book).
- I imagined that rather than a series of concentric circles, the concepts behind comfort zones should be shown on the initial graphic such as an X axis that maps high to low familiarity with the situation. And perhaps a Y axis that goes from no expectations to high performance, or significance or something. In this map, the lower left quadrant would be the high comfort zone.

 BUT, as I got to the next chapters (and they are short several page chapters), the analysis and imagery grew more sophisticated and addressed many of the issues that I was having with the opening.  As an editorial suggestion, I would have liked a note early on that this model will become more sophisticated in the upcoming chapters.  

Overall, I like the book. Even if I tend to think about graphics being more analytical and illustrative of underlying dynamics.

 I tend to think of these sorts of questions in light of some of the work that I do. For instance, in math education, a huge fork in the road starts with the math facts. Some kids really dig in and memorize the math facts effectively. They become fluent and proficient. This gives them enormous confidence as they go forward with math.  Many other kids do not become fluent which leads them to often have trouble following the conversation around math.

Look, we have three cars each with four wheels. These wheels each cost $200.  How much would it cost to buy new wheels? So, three cars times four wheels par car means that we have 12 wheels. The 12 wheels would cost twenty four hundred dollars.  

For kids fluent with math facts, this is pretty easy to follow. The kids lacking proficiency were unable to follow where the 12 wheels came from. These kids are the ones who put their head down on the desk in frustration and tune out.  

Of course, there are many reasons that kids do or don't become fluent. And of course, Mazlo before Lazlo is a powerful vision of what is realistic in planning a better educational system. YET, the data around the approach of Reflex Math defies that logic in that kids from every social economic strata seem to advance through the game-based learning program towards fluency at the same pace. Somehow, the engaging games and the part of the brain used for math resists the usual logic that kids' performance will generally correlate with socio economic strata. This is of course a very peculiar type of learning which could, perhaps be less affected by ACE type trauma?

For homeschoolers or study at home, Reflex is available as Time4MathFacts, with games to learn the multiplication times tables and the addition / subtraction math facts too.