Thu05072015

News

Suspected Los Altos ID thief served arrest warrant

Evelyn Hernandez

A San Jose woman suspected of stealing the identity of a Los Altos resident was found already behind bars, according to Los Altos Police Sgt. Mark Bautista.

Bautista reported May 6 that Evelyn Hernandez, 44, was recently served...

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Schools

Mental health expert dispels myths

Mental health expert dispels myths


Megan V. Winslow/Town Crier
Palo Alto University Professor Paul Marcille addresses a crowd of psychology students and mental health activists last week about myths surrounding mental illness and violence.

In the wake of the 2011 Sandy Hook Elementa...

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Community

Q&A: Meet the city's new public works and administrative services directors

The city of Los Altos has hired three new department directors in the past ten months. The Town Crier recently profiled new Recreation Director Manny Hernandez. This week, the Town Crier profiles Susana Chan, new public works director, and Kim Juran-...

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Comment

Familiar icon pops up in Los Altos: A Piece of My Mind

I was walking to my car parked on State Street when my eye fell on an old familiar acquaintance from my early childhood, totally unexpected to meet in Los Altos. It was the “Steinway” logo over the door of the new Steinway Piano Gallery,...

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Special Sections

New Los Altos shop brews milk tea for gourmands

New Los Altos shop brews milk tea for gourmands


Eliza Ridgeway/Town Crier
Teaspoon, the milk tea shop at Village Court in Los Altos, above, serves a range of bubble teas and snow ice drinks, right.

Los Altos made it onto the milk tea map this spring with the opening of Teaspoon, a new bubble tea ...

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Business

Ed center scores spot in Foothills Crossing

Ed center scores spot in Foothills Crossing


Alicia Castro/ Town Crier
C2 Los Altos tutor Max Shih, left, instructs Homestead High School student Rajesh Suresh.

Los Altos families have a new resource for helping their children ace the test.

C2 Los Altos – a recently opened education cente...

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Books

People

DOROTHY RUTH MATHIS PUDER

DOROTHY RUTH MATHIS PUDER

9/17/1918-4/15/2015

Dorothy Puder died on April 15th in Sunnyvale, California. She will be remembered for her gentle, loving, positive and caring ways and will be greatly missed by family and friends.

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Travel

Cuba libre: Local residents join mad rush of travelers

Cuba libre: Local residents join mad rush of travelers


Natalie Elefant/Special to the Town Crier
Los Altos resident Natalie Elefant noted the vibrant street performances as a traveler in Cuba.

The U.S. restored diplomatic relations with Cuba late last year, enabling Americans to import $100 worth of cig...

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Stepping Out

 PYT's comedic musical opens this weekend in Mtn. View

PYT's comedic musical opens this weekend in Mtn. View


Lyn Flaim/Spotlight Moments Photography
The cast of Peninsula Youth Theatre’s “Once Upon a Mattress” includes, from left, Sophia Graziani (of Los Altos) as Winnifred, Chris Gough (Sunnyvale) as the Prince and Reilly Arena (Palo Alto) as the Queen. ...

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Spiritual Life

Mercifully in His grip: Exploring our true position in Christ

I recently read a wonderful analogy about our true position in Christ. It was shockingly contrary to the messages impressed upon me in church, but deeply rooted in the Bible. The analogy is that of child and a parent. If you have ever taken a small ...

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Magazine

Practice prudent pruning: Maintaining manzanita, ceanothus and toyon

Practice prudent pruning: Maintaining manzanita, ceanothus and toyon


tanya kucak/Special to the Town Crier
Shrub manzanitas are known for their sinuous mahogany trunks and branches. If the foliage hides the bark, prune selectively to open the center so that the bark is visible year-round. This Montara manzanita is ...

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Inside Mountain View

Up to the challenge: Local leaders unite to help at-risk youth

Up to the challenge: Local leaders unite to help at-risk youth


Courtesy of Challenge Team
Jeanette Freiberg, bottom of pile, has fun with family members. The Challenge Team named Freiberg, a student at Mountain View High School, its 2015 Youth Champion.

There’s an ongoing joke among members of the Challenge...

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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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