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News

LA Council race adds 3 new faces to city politics

LA Council race adds 3 new faces to city politics


The Town Crier chronicled the first election of Los Altos City Council incumbent Jarrett Fishpaw in 2010 and documented the Los Altos candidacy of Jean Mordo, who volunteered as a longtime public servant in Los Altos Hills before moving to the flat...

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Schools

St. Simon launches web-based learning management system

St. Simon launches web-based learning management system


Courtesy of St. Simon Parish School
St. Simon fifth-grader Matthew Cummins uses a laptop in class last week. The school’s cloud-based Schoology system boosts organization and collaboration.

Families at St. Simon Parish School in Los Altos laun...

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Community

Los Altos to celebrate 100 years of library use with 'Centennial Faire'

Los Altos to celebrate 100 years of library use with 'Centennial Faire'


Town Crier File Photo
The Los Altos main library is among the more popular branches in the county library district system, set to celebrate 100 years.

In 1914, Babe Ruth made his debut with the Boston Red Sox, wages hit $5 per day, the first ste...

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Sports

Eagles eye another stellar season

Eagles eye another stellar season


Ellie Van Houtte/Town Crier
Los Altos High outside hitter Carmen Annevelink, right, goes for the kill Thursday against Palo Alto, as teammates Sarah Tritschler, left, and Lulu Kishton prepare to play defense. The Eagles won the match in straight ga...

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Comment

Torok, Walter, Dave for MVLA board: Editorial

There’s really nothing major you can criticize about the Mountain View Los Altos Union High School District. It offers a diverse array of effective programs for all types of students. Its instructors, with few exceptions, are outstanding.

Howe...

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Special Sections

'Funabout' Fiat

'Funabout' Fiat


Photos courtesy of Fiat
The 2014 Fiat 500e uses 29 kilowatt-hours per 100 miles, which the engineers claim is the equivalent of 116 mpg of gas use. It has a sticker price of $33,095.

If you believe in climate change, would love to see alternat...

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Business

App developer eyes First Friday as testing ground

App developer eyes First Friday as testing ground


Ted Fagenson

An East Bay app developer is testing his newest creation in downtown Los Altos.

Ted Fagenson, co-founder of Skrownge (pronounced “scrounge”), told the Town Crier that he’s beta testing his mobile gaming app this week ...

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Books

From story to bookstore: Local journey highlights Halloween

From story to bookstore: Local journey highlights Halloween


Courtesy of Dee Ellmann
Jenny Hurwick self-published her picture book last month after decades of storytelling.

During her years working as a teacher and a Los Altos mom, Jenny Hurwick loved to tell stories. One tale she crafted for her son just se...

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People

VINCENT (TIM) MURPHY JR.

VINCENT (TIM) MURPHY JR.

July 27, 1953 – August 12, 2014

Native Los Altan died Medford, OR. Graduated Bellarmine Prep. Married Josephine Domino, 1950. Licensed Auto Mechanic, Private Pilot, skilled Computer Scientist. Tim “could fix anything”. Afflicted with cancer 2001. ...

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Travel

Taking a Turkey trek: Winging it during the World Cup

Taking a Turkey trek: Winging it during the World Cup


Rich Robertson/Special to the Town Crier
The sun sets over the Aegean Sea in Bodrum, Turkey, left.

Tours that whisk you from Istanbul to Bodrum in 11 days are as plentiful as souvenir hawkers in Turkey, but traveling from the Blue Mosque to Topkapi ...

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Stepping Out

'Gypsy' on its way out

'Gypsy' on its way out


Chris Berger/Special to the Town Crier
Alison Koch of Los Altos plays Dainty June in “Gypsy.”

This is the final weekend to catch the Sunnyvale Community Players production of “Gypsy” at the Sunnyvale Theatre. The musical is slated to close Sund...

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Spiritual Life

Ugandan pastor visits U.S. to raise support for children's ministry

Ugandan pastor visits U.S. to raise support for children's ministry


Ellie Van Houtte/Town Crier
Herman Lukwago educates children in Uganda.

Imagine life if your father had 25 children and you were raised in poverty in rural Uganda.

Now imagine that you and your siblings were orphaned at an early age and you ass...

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Magazine

Local events add color to autumn calendar

Local events add color to autumn calendar


Van Houtte/town crier Visitors make their way through the Children’s Alley.

As Los Altos’ signature Chinese Pistache trees exchange their summer green for vibrant hues of yellow, orange and red in the fall, an abundance of local events also ad...

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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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