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News

LA council votes to delay community center update

LA council votes to delay community center update


Ellie Van Houtte/ Town Crier
The Los Altos City Council voted to delay adoption of a community center conceptual design plan last week. The plan includes elements from a design charette held earlier this fall, left.

The Los Altos City Council last...

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Schools

Scientists bring experiments into MV classrooms

Scientists bring experiments into MV classrooms


Ellie Van Houtte/Town Crier
During a Science is Learning geology lesson, Theuerkauf Elementary School students learn about igneous rocks by observing how sugar changes form when heated.

Hundreds of local elementary students perform experiments w...

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Community

Local actors star in PYT's 'Oklahoma!'

Local actors star in PYT's 'Oklahoma!'


Courtesy of Peninsula Youth Theatre
PYT’s “Oklahoma!” features, from left, David Peters of Mountain View, Jenna Levere of Los Altos and Kai Wessel of Mountain View.

Time is running out to catch Peninsula Youth Theatre’s production of “Oklahoma!”...

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Sports

Eagles advance

Eagles advance


Ellie Van Houtte/Town Crier
Los Altos High’s Carmen Annevelink, left, and Kristen Liu put up a block against Mountain View. Annevelink totaled 20 kills.

Mountain View High’s out-of-the-gate energy could last for only so long against rival and he...

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Comment

Coping with addictions: Haugh About That?

Preparing to deal with my lifelong addiction, I stood in front of the mirror ready to confess the shame I’d been hiding. The first step to healing, I reminded myself, is to admit something is wrong.

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Special Sections

NASA, Google agreement preserves Hangar One

NASA, Google agreement preserves Hangar One


Bruce Barton/Town Crier
Hangar One, pictured here last January, will be restored under an agreement between Google and NASA.

NASA and Google Inc. forged an agreement last week that allows Google to lease a portion of NASA’s historic Moffett Fede...

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Business

State Street science center closing Nov. 30

State Street science center closing Nov. 30


Ellie Van Houtte/
Helix at 316 State St. is closing after the completion of a one-year grant from Passerelle Investment Co. The science center became a popular destination because of its various exhibits. Town Crier

A popular downtown destination...

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Books

Children's author signs books at Linden Tree

Children's author signs books at Linden Tree


Author Tiffany Papageorge is scheduled to sign copies of new her book 11 a.m. Dec. 6 at Linden Tree Books, 265 State St., Los Altos.

Papageorge’s “My Yellow Balloon” (Minoan Moon, 2014) is a Mom’s Choice “Gold” winner. In the book, the Los Gat...

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People

JAMES WINDELL SMITH

JAMES WINDELL SMITH

January 11, 1939 – November 6, 2014
Resident of Mountain View

James Windell Smith, a 40 year resident of Los Altos, passed away from complications after a post-surgery stroke November 6th, 2014 in Los Gatos, California.

Born on January 11, 1939 on...

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Travel

Olive Sonoma: There's more to the quaint town than wine

Olive Sonoma: There's more to the quaint town than wine


Eren Göknar/ Special to the Town Crier
While many day-trippers may think that Sonoma is all about the grapes, the region boasts other delights. Try a biplane ride over the patchwork landscape.

Sonoma, a scenic two-hour drive from Los Altos, boa...

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Stepping Out

LA Stage Company opens 'Fairway'

The Los Altos Stage Company production of Ken Ludwig’s new comedy “The Fox on the Fairway” is slated to run Thursday through Dec. 14 at Bus Barn Theater, 97 Hillview Ave.

A tribute to the English farces of the 1930s and 1940s, “Fox” is a romp that p...

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Spiritual Life

Author of Jewish historical novel slated at Congregation Beth Am

Author of Jewish historical novel slated at Congregation Beth Am


The Beth Am Women have scheduled “A Conversation with Author Maggie Anton” 7:30 p.m. Nov. 20 at Congregation Beth Am, 26790 Arastradero Road, Los Altos Hills.

Anton, winner of the 2012 National Jewish Book Award for Fiction, will discu...

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Magazine

Christmas At Our House home tour celebrates 26 years

Christmas At Our House home tour celebrates 26 years


Courtesy of Christopher Stark
Homes on the St. Francis High School Women’s Club’s Christmas at Our House Holiday Home Tour showcase a variety of architectural styles.

The days grow short on sunshine but long on nostalgia as the holidays approach...

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Discovering your risk tolerance

If you have an investment account at a brokerage firm, chances are you’ve encountered a risk tolerance questionnaire.

Such a document purports to determine how comfortable you are with investment risk. Questions range from the simple, “Are you investing primarily for income or for growth?” to the sublime, “If you are offered $100 or the chance to win either $0 or $300, which would you choose?” The firms use the questionnaires to help salespeople sell you suitable investments, but they also serve as protection should the firm be audited by its regulator.

The problem? These questionnaires pretty much tell us nothing about your true risk tolerance.

Daniel Kahneman and Amos Tversky were among the pioneers of what is currently called “behavioral finance,” which attempts to understand the psychology behind the behavior of investors and ultimately how it affects the capital markets. One of their most fundamental findings – for which Kahneman won the Nobel Prize in Economics in 2002 – was that people’s attitudes toward risks concerning gains might be quite different from their attitudes toward risks concerning losses.

For example, in answer to the gambling question above, risk-averse people will typically choose the $100. However, when confronted with the inverse choice of losing $100 or the chance to lose $0 or $300, the same people will commonly select the risky option ($0 or -$300).

The prevailing economic environment also often influences this asymmetrical attitude toward risk. In early 2009, one of my clients had become so risk-averse that she was ready to sell all her investments. Of course I spent time with her explaining the value of sticking to her financial plan and investment strategy. By 2010 – after her portfolio had rebounded not only from market action but from some tactical allocations to a couple of highly undervalued asset classes – she had become so risk-indifferent as to ask what could be done to get her portfolio to outperform that of her neighbor.

Balancing risk tolerance

In practice, I’ve found that risk tolerance should really be considered in two contexts: (1) your need for risk, and (2) your ability to stomach risk.

The first has to do with your financial plan and how much you need to grow your savings in order to have enough money to support everything you want to do for the rest of your life. The higher the needed growth, the greater the risk you will need to take with your investments (and consequently the greater the potential of having to give up some of your goals).

The second involves your emotional ability to deal with losses. If you are fortunate, the two are aligned – that is, your financial situation is such that you don’t need to take on any more risk with your investments than you can handle should markets drop. Your financial life can become stressful, however, when the two are out of sync. There are many people, for example, who keep all their savings in bank CDs. Clearly they are risk-averse in the emotional sense. But they may be taking on too much risk of achieving their future goals given the potential ravages inflation can impose on a long retirement-lifetime portfolio.

In the end, I’m convinced that a financial plan will help you not only balance the two risk tolerance components, but also act as an emotional anchor when times get tough (like in 2008).

Knowing that you have a plan and maintaining the discipline to follow it can help you avoid making the kinds of risky, dysfunctional investment decisions that we as human beings are all too prone to do.

Artie Green, a Los Altos resident, is a Certified Financial Planner and principal at Cognizant Wealth Advisors. For more information, call 209-4062 or email This email address is being protected from spambots. You need JavaScript enabled to view it. .

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