Sat12202014

News

Council seeks more options for community center

Council seeks more options for community center


Town Crier File Photo
The Los Altos City Council approved an appropriation to examine options for a new community center to replace the aging Hillview facility.

The Los Altos City Council last week voted narrowly in favor of examining further opti...

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Schools

Local schools participate in  national Hour of Code activities

Local schools participate in national Hour of Code activities


Ellie Van HOutte/Town Crier
Himan Shu Raj, a volunteer from Microsoft, advises Los Altos High ninth-graders, from left, Serhat Suzer, Jamie Bennett and Chris Yang as they participate in the school’s Hour of Code Showcase.

Local schools participa...

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Community

Take a dive into the holiday archive

Take a dive into the holiday archive

Town Crier staff made a quick cruise back through the newspaper's archives to find some late-December reading as inspiration for eating, drinking, decorating and more:

Beloved holiday books build the spirit of the season and staff at Los Altos’ Li...

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Sports

Pinewood poised for another title run

Pinewood poised for another title run


Ellie Van Houtte/Town Crier
Pinewood’s girls basketball team is receiving contributions from several new players, including freshman Stella Kailahi, above.

Complacency shouldn’t be a problem for the defending Division V state champion Pinewood S...

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Comment

Letters to the Editor

Ticket motorists for U-turns on Main Street

As I was walking downtown on Main Street recently, something came to me out of the blue. The town of Los Altos is missing out on a huge revenue stream. I realized that if all the cars – there were th...

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Special Sections

Looking Ahead

Looking Ahead


s in line to be mayor of Mountain View in 2015.

Mountain View anticipates the following changes in 2015:

• Beginning Jan. 1, Mountain View City Councilmembers will receive a raise to $1,000 per month as a result of the passage of Measure A in...

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Business

Your 2015 stock market game plan

It’s been a maddening month because of oil and gas, especially in stocks and bonds. Then, consumer spending pushed stocks higher Thursday, easing investors’ jitters about the global economy and prompting them to consider how to invest in ...

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Books

Gawande's

Gawande's "Being Mortal" proves an important book on aging


Books about death and dying are usually not on my list of “must reads.”

I couldn’t resist, however, the best-selling “Being Mortal: Medicine and What Matters in the End” (Metropolitan Books, 2014) by Atul Gawande.

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People

SANGEETA SACHDEVA

SANGEETA SACHDEVA

Sangeeta Sachdeva, 55, wife of Subhash Sachdeva and mother to Natasha and Tanya, died at 8:54pm, Sunday, December 7, 2014 from respiratory failure.

Sangeeta was born on October 18, 1959 in Delhi, India. She was born to Moti Sagar and Raj Kapoor an...

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Travel

South Tahoe renovations enhance off-mountain seasonal fun

As any enthusiast knows well, there is more to the enjoyment of winter sports than skiing or snowboarding.

While many winter resorts make minor upgrades each season, the off-mountain attractions and amenities can be as enticing as the activities on ...

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Stepping Out

Aurora Singers to emit 'Musical Glow' Friday

Aurora Singers to emit 'Musical Glow' Friday


courtesy of Aurora Singers
The Aurora Singers are scheduled to perform a seasonal concert Friday night in Palo Alto.

The Aurora Singers’ “Winter’s Musical Glow” holiday concert is set for 7 p.m. Friday at the Unitarian Universalist Church of Pal...

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Spiritual Life

Enter the superhero: Finding the God who loves you

In my life-coaching practice, I see a lot of pain. Much of it stems from fear and guilt, often expressed as low self-esteem, anxiety, a lack of forgiveness both for oneself and others, anger – and so on.

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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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