For a moment after I read “How Many Mutual Funds Routinely Rout the Market? Zero” in The New York Times, I was jealous of Scott and Andrew. It was a satisfying I-told-you-so moment for them. Alas, I am not a financial writer. But as I started thinking about managed funds, index funds, and common sense, I realized that the Times article offers a nice parallel in medicine. Think of it as the Healthy Couch Potato Lifestyle.
We long for a fund manager who knows the non-existent “secret” to beating the market. In much the same way, we search for the health guru with the secret to weight loss, good health, and a long life.
A “managed health” point of view is the result of this kind of thinking. It brings us fad diets that range from the innocuous, but not all that great, grapefruit diet, to the dangerous feeding tube diet.
Sadly, managed health thinking brought us “food” products that, in the name of better health, have made us sicker. Think margarine, olestra, and artificial sweeteners. Managed health thinking is responsible for a generation of discarded egg yolks.
Let’s not leave out the pharmaceutical and supplement industry. Ephedra was banned by the FDA because it was linked to high blood pressure, heart attacks, muscle disorders, seizures, strokes, irregular heartbeat, loss of consciousness, and death. And who can forget Fen-Phen, miracle weight loss drug responsible for pulmonary hypertension and heart valve issues.
When I look at this list, it almost makes a managed mutual fund look smart compared to the managed health of extreme diets, fake food, or looking for the super pill. And we know managed funds are anything but smart.
So what’s the health parallel to the index fund, then?
Get your basics in order. Then quit messing with them.Sound familiar? It should: it’s fundamental couch potato-ism. The basics comein three parts - diet, exercise and healthcare.
- Make it a habit to choose actual food that you can find on the perimeters of the grocery store where the vegetables, fruit, seafood and meats live. Go to the dairy case and find some cage free eggs. Make this the foundation of your diet, most of the time. Then quit over thinking it. There is no need to hyper-manage your diet, scouring food labels looking for the magic ratio of nutrients that will make you superhuman.
- Don’t get fanatical about your exercise. Simply move at a rapid pace for half an hour most days. Add some exercise that builds muscle a couple days a week. You don’t need an expensive gym membership, a fancy personal trainer, or even a special room in your house to do this. You can walk or run though your neighborhood or on a favorite trail. And you can use body weight exercises like lunges, squats and pushups to keep up your lean muscle mass. If your regimen requires detailed records, special apps on your phone, or expensive equipment, you are probably veering into “managed” territory.
- Find a doctor who wants to keep you healthy but doesn’t want to make you sicker in the process. He should be willing to discuss the benefits and risks of healthcare choices, such as medications and screening tests. If you understand the risk of getting prostate cancer and the risk associated with screening for it, it’s okay to pass that test up. You are the one who knows if you can live with the possibility of a missed cancer. If your doctor insists you must have every procedure and intervention, even when the benefits don’t seem to outweigh the risk, it might be time to find another doctor.
A word of caution: such decisions should be based on actual medical evidence. If you are relying on anecdotes or internet conspiracy theories, you are once again in treading in “managed” territory.
This moderate lifestyle might not guarantee health and longevity. You still might die prematurely while Uncle Mort lives to 99, at which point he dies in his Barcalounger, cigarette in hand. But I wouldn’t bet on that outcome anymore than I’d bet on a stockpicker.