Turbulence
Will tomorrow be like today? Will next year look like the last few? I used to believe more in continuity. I don't anymore — and the reasons are structural, not cyclical.
Volatility has always been the enemy of steady financial growth. But turbulence is something beyond volatility. It's the compounding of multiple large, unpredictable forces operating simultaneously. And it's overtaking volatility as the defining feature of the investment environment we're planning around.
Corporate and Pension Fragility
General Electric's pension plan freeze was a signal, not an anomaly. GE was one of the most admired companies in America for most of the 20th century. If a company of that stature can freeze its pension, it raises a serious question: what pension plans — corporate or government — can you actually count on?
Many state and local pension plans are in serious distress. The math of missed return targets and compounding shortfalls, as I've written about elsewhere, is unforgiving. These aren't solvable problems in most cases — they're managed declines.
Climate Is a Financial Issue
This isn't a political statement. It's an insurance and investment observation. Drought, heavy rains, hurricanes, fires, flooding — these are increasing in frequency and severity, and they have direct financial consequences:
- Louisiana is losing habitable land to the Gulf at a measurable rate
- South Florida faces seawater infiltration that affects property values and insurability
- Widespread fires in southern California have made home insurance increasingly unavailable or unaffordable
- Mississippi Delta flooding is increasing in frequency and severity
I had a client who lost everything to fire. The experience isn't abstract to me. Climate directly affects business operations, property values, insurance availability, and profitability — all of which affect investment performance in ways that are structurally different from typical market cycles.
What This Means for Planning Over a 50-Year Horizon
For a client in their 30s, we're planning across 50 years. Over that horizon, I can't tell you which companies will survive, which pension funds will be solvent, or which geographic areas will remain fully insurable. I can't name five major companies today with certainty about their status in 2070.
What I can identify is a category of institution with a 160+ year track record of surviving every crisis in modern history: mutual life insurance companies. They didn't fail in 1929. They didn't fail in 2008. Their business model — spreading risk across large pools, investing conservatively, and operating with regulatory oversight — is designed for exactly the kind of turbulence we're entering.
Simplicity, consistency, and guarantees. That's what I'm looking for when I'm planning for someone who needs to be okay at 82.