Jessica Alba and the Sharpe Ratio

A boiler-plate image of a happy retired couple looking into the sunset at a beach. Sunset images are less popular among financial advisors than ones with greenery and dogs. Advertising executives are of the view that green leaves convey a subliminal message of green dollar money. And the bounding dogs imply vitality – i.e. you will still be alive by the time your investments have matured to the point that you can afford to play with your dog in a park in the middle of the week.

The investing public in America has been relentlessly carpet-bombed with the stock investing mantra. Most financial advisors will repeat it for you: “Thou shalt heed that stocks are the best hedge against inflation, they may earneth thee 10% a year. Buy them ye must!”. And just like the Mormon Church, this is followed up with colorful marketing paper containing smiling pictures of financially secure people and their jubilant dogs.

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