efficient frontier 03.2016
TRANSCRIPT
03
I S S U E
Efficient Frontier J u l y – S e p t e m b e r
2 0 1 6
WORDS OF WISDOM
Benjamin Franklin
“An investment in
knowledge pays the
best interest”
Ralph Waldo
Emerson
“It is one of the most beautiful compensa-tions in life that no man can sincerely try to help another without helping him-self”
Abraham Lincoln
“Always bear in mind
that your own reso-
lution to succeed is
more important than
any one thing”
THIS ISSUE
Behold the Mighty Oxen P.1
Look Into My Crystal Ball P.2
Bring on the BBQ! P.3
Upcoming Events P.4
Behold the Mighty Oxen In the early to mid 1800’s there were approxi-
mately 7 million people that took part in the
westward expansion after the Louisiana Pur-
chase. Most of them left with grand dreams
of future prosperity. However, the road to
that prosperity was known to be long and
arduous. They had a very important decision
to make when deciding to move west. Do I
purchase a team of horses or oxen to pull our
wagon full of belongings?
The Horse was rather expensive, fast, and
agile. However, they require a great deal of
care to maintain and were prone to running
off during the long journey. The Oxen were
relatively inexpensive, strong, and dependa-
ble. However, they were slow. The pioneers
realized they would be in harsh, unpredicta-
ble conditions for a prolonged period of time
with little to no vegetation. Most chose the
Oxen. Much like those pioneers with dreams
of future prosperity, we have a similar deci-
sion to make.
The global economy has been slowing down
for the past year. The stock market is in the
midst of a bull market (perfect for horses)
that started in 2009 but has been showing
signs of slowing as of late (not so good for
horses). The journey ahead is fraught with
uncertainty. Yet, I believe, much like those
pioneers, that the future holds great prosperi-
ty. Just as the pioneers chose the dependable
oxen for their difficult journey westward, so
too should we. The importance of finding
investments that may be considered slow but
dependable becomes more apparent during
this stage of the journey.
I mentioned in previous pieces that the pri-
mary ingredient for growth is innovation. I
firmly believe those innovations are coming,
and are awaiting us on the next leg of our
journey. Until then, we should rely on our
dependable oxen to slowly pull us toward our
destination. Nevertheless, when those inno-
vations eventually come, they happen fast
and require an agility in a changing world.
Much like a horse...
Matt
Look Into My Crystal Ball
My wife and I spend most Sunday
evenings watching television. We
recently came across a channel that
plays old reruns of Johnny Carson.
Watching reruns from the 1970’s
feels a little like being Marty McFly in
Back to the Future. It is quite enter-
taining to be armed with a certain
knowledge of what the future holds
for Johnny Carson and his guests as
they discuss current events.
After watching for several weeks, I
was excited to here that Carson
would have an “expert” guest on.
Naturally, this gentleman had a varie-
ty of degrees and was well respected
in the scientific community. The
guest had just written a best selling
book on what the world would look
like 30 to 40 years in the future (the
book was written in the early 1970’s).
Two of his
greatest claims
were that the
United States
would be facing
mass famine
and that oil
would be completely depleted from
the globe by the year 2000. Current-
ly, approximately 2/3 of the United
States is considered overweight and
the world is concerned about having
too much oil (see Efficient Frontier
Issue #1). It amazed me that such a
prominent person at the time would
so horribly predict the future.
How Did They Get It So Wrong?
This gentleman made 1 major mistake
that caused him to so poorly predict
the future. He was operating under
the assumption that nothing would
change. Unfortunately for him,
change is the only thing that is cer-
tain. He assumed that we would
never develop better forms of agricul-
ture or drilling techniques. I once
spoke with my Grandmother, who
was born in 1913, about life as a
child. She remembered life before
electricity in your home and having
horses (rather than cars) for transpor-
tation. I asked
if she ever envi-
sioned some-
thing as simple
as a microwave
for cooking
foods. She
emphatically
responded, “Never!” What do the
expert from the Carson show and my
grandmother have in common? Nei-
ther could predict the future with
great certainty because they couldn’t
imagine the unimaginable.
Can We Predict The Future?
The core principle of investing is a
belief that the future will be better
than the past. No one would invest
today if they believed they would lose
money in the future. We all spend
our time reviewing the past in an
effort to learn from it. After all, those
who do not learn from the past are
destined to repeat it. Unfortunately,
we refuse to learn from the past. The
mistake that is repeatedly made deals
with the “doomsayers” among us.
These doomsayers tend to be very
educated and at times lay out a very
logical and compelling case. Howev-
er, they fail to take into account the
indomitable desire for the human
race to grow and innovate. That
variable in their “models,” the unim-
aginable, permanently changes the
direction of our lives. The only thing I
can clearly see in my “crystal ball” is
change. Those changes will make our
lives better and create opportunities
where none previously existed (See
the Innovations section). That is the
future I believe in and hope you do
too.
Seeing as we are midway
through the year, I felt it was time
to peer into my crystal ball for
guidance...Sis Boom Bah!
EYE ON THE NUMBERS
Innovations
Thomas Edison invented
the lightbulb in 1879
In 1886 the first gasoline
powered automobile was
invented by Karl Benz
Henry Ford created the
first Model T Ford in
1908 which was the first
mass produced automo-
bile
Volume production of
personal computers be-
gan in 1965 and the first
sold for $3,200
The first prototype of the
Internet was developed
by the Advanced Re-
search Projects Agency
Network in the late
1960’s
The Human Genome
Project was declared
complete in 2003
Two of his greatest claims were that
the United States would be facing
mass famine and that oil would be
completely depleted from the globe
by the year 2000.
EYE ON THE NUMBERS BBQ Facts*
Lyndon B. Johnson host-
ed the first barbecue at
the White House that fea-
tured Texas-style barbe-
cue ribs.
Ellsworth B. A. Zwoyer of
Pennsylvania patented a
design for charcoal bri-
quettes in 1897
The biggest and most
famous barbecue compe-
titions are “Memphis in
May” and “The American
Royal” in Kansas City
*BBQ Facts provided by
www.mobile-cuisine.com
Ask Matt
Each quarter I will answer a
question (or maybe 2) from
you. I tend to get some great
questions from my clients on a
regular basis during our meet-
ings. I have found that the
answers to those questions
are pertinent to quite a few of
you. Don’t worry though. I will
maintain the privacy of those
asking the question as well as
any personal details. Addition-
ally, if you have a question you
would like me to address in the
practice update give me a call
or shoot me an email
Q: What is the “Brexit” and why
is there so much concern about
it?
A: The “Brexit” is referencing the United
Kingdom’s recent vote to leave the Euro-
pean Union (EU). The EU is a group of
countries that, for the most part, gave up
their currency for one standard currency
called the Euro and in return received
preferential trade deals with members of
the EU. However, the United Kingdom
never gave up the British Pound but was able
to utilize those trade deals. The sticking point,
as of late, has been that being in the EU has
meant a loss of each countries autonomy to
some degree. Thus, the people of the United
Kingdom voted that their autonomy was
more valuable than the preferential
trade deals. The “panic” came due to
the fear of the unknown. Will other
countries leave the EU? Will the Euro
fall apart? I believe the structure of the
EU and Euro will look very different in
the years ahead. However, when the
dust settles, we will be better off because of
it.
This Quarter ’s “Ask Matt”
At the end of June I had a great event
that was hosted by Arnold Stove &
Fireplace Center. Alan Bowman
(Competitive BBQ’er extraordinaire)
spent 2 hours showing us how to
have a great BBQ (not to mention
how to properly enjoy the food). He
started by showing us 2 delicious
appetizers. Cream Cheese filled Jala-
penos wrapped in bacon, and Mac
and Cheese with Rib meat that was
topped with bacon. Al then spent
considerable time explaining how to
pick out, prepare, season, and grill
the perfect rack of ribs (both pork
and Beef Ribs). We ended the even-
ing with a wonderful parfait prepared
by the lovely Mrs. LaPlant. The
weather was fantastic and the com-
pany was great. I appreciate all those
that spent their Thursday evening
with me enjoying some wonderful
BBQ (more pictures of the event are
posted on my website). No worries if
you couldn't attend. I plan on doing
more events like this in the future so
let me know if you're interested in
coming.
Bring on the BBQ!
Matthew R. LaPlant, CRPC®, AAMS
®
Financial Advisor Chartered Retirement Planning Counselor
SM
14755 North Outer Forty Drive, Suite 500 Chesterfield, MO 63017 636-534-2065 (Office)
EMAIL: [email protected] WEBSITE: ameripriseadvisors.com/matthew.r.laplant/
Upcoming Events
Apple University
July 28, 2016
6:00 PM—8:30 PM
Missouri Athletic Club
1777 Des Peres Road
St. Louis MO 63131
This seminar will feature Greg Ray, Apple certified technician, to answer
your questions about using iPhones, iPads, etc. Please feel free to bring
your device with you!
If you have a specific question ahead of time, please let me know. I will
make sure he addresses it in the general tips and tricks on using the de-
vices effectively portion.
Presented and sponsored by Putnam Funds. Putnam Funds and its representatives are not affiliated with
Ameriprise Financial. This is an informational seminar. There is no cost or obligation.
Events
I f there i s some-
th ing in par t i cu la r
tha t ca tches your
eye, p lease do not
hesi ta te to reach
out to me . I am
ant ic ipa t ing tha t a
major i t y o f the
events w i l l reach
maximum capaci t y .
Efficient Frontier Issue 03 July-September 2016
The views expressed here reflect the views of Matthew R. LaPlant as of 6/31/2016. These views may change as market or other conditions change.
Actual investments or investment decisions made by Ameriprise Financial and its affiliates, whether for its own account or on behalf of clients, will not
necessarily reflect the views expressed. This information is not intended to provide investment advice and does not account for individual investor
circumstances.
Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon and risk tolerance. Past
performance does not guarantee future results and no forecast should be considered a guarantee either.
Ameriprise Financial Services, Inc., Member FINRA and SIPC.
© 2016 Ameriprise Financial, Inc., All rights reserved. 1541733ACMR0716