Made this for Katie & Mike

two months ago. It was fun cutting all that grass.

Christmas Revisited

So it's about that time of year again . . . time for me to deliver the "Attention: Did you know Christmas is Over?" notices to all of my neighbors' doors! In years past, I have thought to myself, "Could it really be that hard to take a wreath down and put it inside?" Now, the beam is in my eye as I present to you . . .

My better late than never Christmas post! We'll keep it short and sweet. These are a few highlights of our trip to Utah this year. Really, just the things we happened to take pictures of:

Brady hosting the first annual Guess Who? Tournament for New Year's Eve. I couldn't believe he really went through with the entire bracket system! It was actually pretty fun . . . although I still feel that I was cheated out of winning :)

The four of us, all in our Threadless T-shirts. Tanner is currently obsessed with this hilarious T-shirt website, and the rest of us are starting to catch on. Come to think of it, Kati may be obsessed as well. Her shirt says, "If your pants are on fire, being a liar becomes less important." Mine says, "Haikus are easy/but sometimes they don't make sense/refrigerator." Brady's doesn't say anything, but it's the best looking tv set you never knew you wanted. Tanner's is a Scrabble bench with the letters Q, X, W, V, W, Z, and V on it.

Get-together at Jacob's with Dave, Amy, Jacob, and Robbie. We had a blast and laughed so hard this night!

This is our only picture of either of the boys from our Christmas trip (we were really bad with the camera, apparently). I love this one though because we have an almost identical one of Ben, which appears in our wedding video. I really need to track that picture down!

And now for the projects! I was really in a project mood on this trip, and I roped my family into doing all of them with me! Good thing they are good sports (and good thing my dad is an amazing woodworker). This is the beginnings of a wood-burning project that I hope to finish and post here sooner rather than later. I am SO excited about doing it!

Mom and I are both serving in Primary, so we made our yearly music CD's together, as well as these amazing books for teaching this year's new song.

The birthday calendars! I saw something like this at Anthropologie for like $25. We made 6 of them for $20. I am so excited to have all of the important birthdays in one place and to not have to write them on the calendar again every year.

Hiatus

Everybody needs one every once in a while, I guess. For about 39 reasons (one of them pictured above), I just needed a break from blogging. A 2-month break, to be exact (with the exception of one Henry quote a couple of weeks ago). And it felt pretty good! Now I'm ready to get back into it. My life has been thrown around in circles and completely reorganized (more on that later, hopefully), and now I'm ready to face you all again. More blogging soon, I hope!

And I Quote . . .

"I want to marry someone named Honkfrensen Henry, so then my name can be 'Henry Henry.'"

Two Videos

My last post was pretty heavy, so I thought I'd better post some lighter fare. Here's a video of some of Ellis' latest words (although while we've been in Utah he's picked up some more!). He's got a great little sound he makes with his nose. Listen for it when he says "shoe" and "drink." The best we can spell it is "k-hng." Enjoy!

Ellis' Words from Ben and Jenn on Vimeo.

And here's Henry's latest production: An exercise video! Yes, he came up with the idea all on his own, and invented his own moves as well. I think he chose a great back-up exerciser as well. :) Follow this routine everyday, and I can guarantee results...of some sort.

Henry's Exercise Video from Ben and Jenn on Vimeo.

Investing Advice

Another semester has gone by, and I'm that much closer to finishing my Ph.D. program. I've only got one more semester of doctoral coursework left, and then next year I'll have to take 6 MBA courses to be completely done with classes for the rest of my life. After that, I'll just have to write a dissertation to be done! No sweat, right? :)

Anyway, it was a great semester. Not only did I get my best grades so far at Harvard (woohoo!), but I felt like I actually learned lots of useful stuff. Even better, a couple of the things I learned might even be useful to non-economists as well. You see, before this semester, people often asked me about when to put their money in the stock market and other such investing questions, but I didn't really know that much about investing so I always felt like I wasn't qualified to say much. This past semester I had a whole class on asset pricing, which made me feel slightly more competent in answering this type of question. So I thought I'd pass along a few tidbits that might be of interest.

***DISCLAIMER 1***

This is a nerd post. I think it's a useful nerd post because it gives some advice on how to manage your money. But it's still a nerd post. Don't feel obligated to read it.

***DISCLAIMER 2***

What you are about to read is based on historical data. When predicting stock prices, the best anyone can do is use historical data (and economic theory) to forecast future movements, but it is impossible to perfectly predict the market. In fact, even the best investment managers aren't all that accurate with their predictions. Investing (in any market) is always risky. My advice is just some broad generalizations that have proven to be good ideas in the past. That doesn't mean you will automatically make money if you follow it.

Okay, with that out of the way, here are 4 tips on managing your money:

1. The stock market is predictable: How many of you have always been told that you can't predict the market? I know I have been told that lots of times. To some extent it's true. If you're trying to predict whether the market will rise or fall tomorrow, you've got about a 50/50 chance of getting it right. But here's the thing: the market is predictable at longer horizons, say, 3-5 years. How can you predict it? By using a financial ratio like the price-earnings (P/E) ratio. The idea behind these ratios is simple. If stock prices are really high relative to how much a company is earning, then you'd guess that the price is going to come back down. In the long run, these ratios are mean-reverting. If the P/E ratio is too high, it's because either (a) prices are too high or (b) earnings are going to rise a lot in the future (they are too low right now). Historically, earnings are pretty stable, so the answer is nearly always (a). Thus, if the P/E ratio is a lot higher than its average value, you can expect stock prices to fall over the next 3-5 years. So, if you're looking for a good time to put more money in the market, check out the P/E raito. If it's high, I'd wait a while. If it's low, maybe it is a good time to put some money in. Lucky for all of us, a financial economist from Yale (Robert Shiller) collects this data and puts it on his website here (download the excel file in the paragraph that says "Stock Market Data", then look at figure 1.3 in the excel file). Right now, the P/E ratio is 20.12, a bit over the historical average. So, at the moment, I'd call it a neutral market.

It's important to remember that you are looking at a longer horizon. Just because the P/E ratio is low today, that doesn't mean it won't go lower before it comes back up. That means that you might see a low P/E ratio, put money in the market, then lose money as prices fall even further before they come back up again. Sometimes you have to ride these times out before you make money. In other words, don't try to use the P/E ratio to predict where the market will be one year from now; it doesn't work. And, if you're looking for a quick place to make money, don't try the stock market.

I also want to point out that these financial ratios account for only about 60% of long-term stock price variation. That means that the other 40% could go any which way. 60% is pretty good, actually (way better than the 0% you get when trying to predict the market tomorrow!), but there is obviously still some risk involved in these bets.

2. Diversify: I'm hoping that everyone has heard that you have to diversify. Unless you are a professional investment manager, the most effective way to diversify is to invest in stock market indexes like the S&P 500 or the Russell 2000, which allow you to buy 500 or 2000 stocks all at once. There are also indexes for particular sectors of the market (e.g. financial indexes, technology indexes, manufacturing indexes, etc.). Picking individual stocks that you think are going to do well is generally not worth it, in my opinion. If you have a lot of time on your hands, you could try to do it, but it's much riskier and very hard to do.

One way to diversify that people might not think about as much is to put less of your money in the industry you work in, particularly in your own employer if you work for a public company. For example, say I worked for Enron in 2000. If I had put all of my retirement in to Enron stock (as many Enron employees did), I would have lost my job and my entire retirement by 2002. Bad idea. Another, less extreme, example: Say I work for a financial company. It would be smart to put less of my money in financial stocks since when those stock prices go down I am also more likely to lose my job, take a pay cut, or get a smaller bonus. By diversifying away from your job, you protect your wealth a bit better.

3. Rebalance: Let's say you take a look at the P/E ratio and it's relatively low (say, 13) so you increase the portion of your retirement wealth in the stock market from 50% to 60%. To keep things simple, let's say that the you've got the other 40% in a savings account (in reality, you'd probably have most of it in bonds or other such investments). Now suppose that stock prices drop even further, so that the P/E ratio is now at 10. Do you still have 60% of your portfolio in stocks? No. Since stock prices have fallen, that portion of your portfolio is worth less than before, so you now have less than 60% in stocks. What should you do? Take even more money out of your savings account and put it in the market to get back to (at least) 60%. You might even want to put more than 60% in the market since the P/E ratio is even lower than it was before. This process is called rebalancing. This is hard for many people to do; if you've just lost money in the stock market, it's hard to want to put more in. But that's exactly when you should be putting more in, since the investment opportunity is even better.

4. Refinance: I was surprised to learn in my class that many people fail to refinance their mortgages when mortgage rates drop well below their current rate. It's worth it to check out mortgage rates from time to time to determine if you should refinance. A good rule of thumb is to refinance when current mortgage rates are 1% lower than the rate you pay. Over time, you can save a lot of money just by paying a little bit of attention to mortgage rates.

Christmas Highlights

Sing-along with our musical friends. This is one of my favorite holiday festivities EVER! We sang mostly duets from this fabulous book, drank hot chocolate, and ate yummy treats.

The Joy School Nativity program. Henry got to be an innkeeper AND a shepherd! These kids performed their show at a nursing home, and they were so amazing that they got to do the show again for parents and charge $5 for tickets. Yes, they were that sensational!

Christmas piano recital -- for my four beginner students. It was at our house and was very cozy and magical.

I love these kids!

Christmas morning was pretty exciting around here! Henry LOVED the race track Santa brought him. That was the major highlight of the day. Don't believe me? Watch the video clip below.

Henry's first experience with the great disappointment in the toe of the stocking. "An orange? Why did Santa give me an orange?" He sat there bewildered for several minutes, and then finally asked, "What should I do with it?"

Racetrack from Ben and Jenn on Vimeo.

Balloon Birthday Party

Since Henry missed out on his birthday celebration with cousins (his birthday was over Flu-kesgiving weekend), we decided to throw a spur-of-the-moment friend birthday party for him. He made it easy on me (and our budget) by choosing a "Balloon Birthday Party." I've decided this is the perfect theme for a 4th birthday. What 4-year-old kid doesn't absolutely LOVE balloons? And besides the half-hour Ben spent feeling a little faint from blowing up so many balloons, it really didn't require much prep at all. We just bought a bunch of balloons and did some brainstorming the night before!

The cupcake cake, inspired by Family Fun and The Small Object (so simple!)

My mom sent some fun balloon-themed party goods just for the party.

The punching balls were a hit! We had the kids play with their balloons while dancing to "Move Your Arms Like Henry" by the Wiggles (thanks, Kati!). Other exhilarating games included:

• Pop the balloon and see what's inside (candy and the next game!)
• Pass the balloon relay
• Shooting rocket balloons
• Shake your sillies out
• How far can you throw it?
• Keep it up!
• Balloon movie

My favorite activity was writing letters to Santa and sending them to the North Pole on a magic helium balloon.

The kids really went for it and loved seeing the balloon take off!

I'm pretty sure this is the fastest way to get letters to the North Pole.

Here's the happy bunch!

And here's the 4-year-old himself! I've decided 4 is a really good age. I can already see so much change in him since 3. He's turning into a big kid, and the wheels in his head are really starting to spin. It's so fun to hear the ideas he comes up with. More on that in a future post. For now, I'll just say that I love this boy, and it's going to be a good year.

Flu-kesgiving

For Thanksgiving this year, we were originally planning on taking a trip down to Virginia to visit Ben's sisters for the weekend, leaving Tuesday night and returning Sunday. We thought it would be nice to spend the holiday with family, enjoying the company of some of our favorite people. Henry was thrilled about the chance to play with cousins and even celebrate his birthday with them!

But then we had a better idea. It would probably be a lot more fun to wait until Wednesday, late afternoon, when Thanksgiving traffic reached its peak of festivity, and then take a five-hour drive to Connecticut (normally a two-hour drive). When we got to Connecticut, we could stop at Friendly's for a delicious dinner, then sleep over in a hotel. Then, on the morning of Thanksgiving, we could eat a lovely Dunkin' Donuts breakfast (the only place open on Thanksgiving) before braving the traffic for our 3 1/2 hour return trip. Then we could get home around 2:00 on Thanksgiving day and sit around for the rest of the day.

Some of you may say this Plan B doesn't sound quite as great as Plan A. Some of you may argue that we could go to Friendly's and Dunkin' Donuts here in Massachusetts, without the added "hassle" of 8 1/2 hours of driving. Well, you obviously don't know how much fun it can be to stay in a Comfort Inn.

Okay, so that is what we did for Thanksgiving. But it's probably not quite how we would have planned it had we had our heads on straight. On Sunday I came down with what we think was Swine Flu, which Henry had suffered through the previous week. By Tuesday I was feeling nowhere near ready to pack for a trip to VA, so we called off our plans for the time being. By Wednesday afternoon, we were feeling so sorry for ourselves, knowing that we were going to miss Thanksgiving completely, so we decided to stock up on hand sanitizer and medical masks - so as not to infect our entire family - and we packed in an hour and got out the door. Well, as I mentioned above, we got to CT in 5 hours -- which was supposed to be 2 hours -- 1/4 of our entire drive. Worst traffic day of the year, apparently. When we stopped at Friendly's for dinner, I took Ellis out of his car seat and he was roasting. I checked his temperature, and he was a steamy 101.6 degrees. Knowing what Ellis was in for if he was only beginning his bout with the flu, and seeing the gloomy foreshadowing of horrible traffic to come, we knew we could never go the rest of the way to Virginia. Rather than suffer through traffic for another 5 hours home, we got a hotel, tried to make a party of it, and watched movies in our room until we fell asleep.

The next day when we made it home, a few friends saved the day by bringing over two plates of Thanksgiving food. We were pretty bummed about missing our trip, but the turkey and mashed potatoes helped ease the pain. I was still in serious recovery mode, and Ellis was pretty sick, so we didn't do anything major with the rest of our weekend, but we did try to make it fun, mostly for poor Henry's sake. We got a Christmas tree, made a paper chain for Christmas, and celebrated Henry's birthday with just the four of us. His birthday was on Saturday, and by that day Ellis was pretty miserable (with a double ear infection on top of the flu symptoms), so I took him to the doctor while Henry and Dad had a little one-on-one at the science museum. I actually think that was the perfect treat for Henry. Ben is his absolute favorite, and the science museum is like paradise for his curious little mind.

I am thankful for pretty paper.

And for this little 4-year-old who was very patient and understanding.

Henry is thankful that Ellis knows exactly what to get him -- yet another "Car Show" car.

Ben is thankful for Tinkertoys and mouthwash. Did you know that Ben is the only one in our family who swishes with mouthwash, and he's the only one that didn't get sick? I've heard that swishing with mouthwash regularly can prevent Swine Flu. Anyone want to argue with me on that one?

Ridin' the Wave!

Jenn and I are cool enough to have in our hands 20 coveted invitations to Google Wave. If you haven't heard of Wave, it's Google's attempt to recreate email in a more conversation-like way. Basically, it combines email and chat together in one, and adds some other little bells and whistles on the side. If you'd like to see it in action, Google has a 10 minute video of how it works here. The first 20 people to respond (either in the comments or by email) with your email address get the invites! The race is on!

Photo Shoot

I am SO happy with JoDee's latest photo shoot of our family! I feel like it accurately captures our love for each other and for Boston. If you want to see more, go here (and for more details on her photography business, go here). Thanks again, JoDee! It was so fun to have you, Olivia, and Ben come for a visit!

Angels in the Airport

We took a little jaunt to Utah last week to say goodbye to Ben's parents, and Ben came back a few days earlier than me. It was my first time flying solo with two kids. Let's just say that it's an experience I'm not eager to repeat! I took zero pictures of our trip (darn!). But let me tell you about all of the angels I met in the airport:

1. Ticket agent who made me take 2 lbs. out of my suitcase to get down to 50 lbs., then quickly looked from side to side and told me to put the 2 lbs. of stuff back in the suitcase.

2. Lady behind me in security line that insisted on pushing my items through the detector for me.

3. Lady at our gate who noticed Ellis kept walking away from me while I was diligently waiting with our bags. She positioned herself and her suitcase at the end of the aisle of seats so Ellis couldn't escape, and both boys stayed in my sight while getting their wiggles out.

4. Lady who offered to hold Ellis while I buckled the car seat in (not sure how on earth I would have done that alone), and then later unfolded my stroller for me.

5. Man next to us on plane #1 who kindly pretended to sleep through Ellis' shrill screaming, and then happily carried our car seat off the plane.

6. Man across the aisle who made faces at Ellis, in spite of his constant shrieks, and found humor in our situation (told me I NEED to watch Bill Cosby's "Himself," and laugh at this situation later). He also told Henry he was the best 3 1/2 year old he's ever seen.

7. Henry. He really was an angel too. When Ellis finally fell asleep in my arms, and Henry wanted a book/drink/toy, I told him I couldn't get anything for him or Ellis would wake up, and he tearfully said, "okay" and then didn't say another word. I love that boy.

8. A true heavenly angel who hushed Ellis to sleep. He slept for 90 minutes on the first flight. It was a miracle for him.

9. Woman who saw us walking around the airport during our layover who asked sincerely, "Is there ANYTHING I can POSSIBLY do to help you?" (I must have looked pretty pathetic)

10. Gate agent who moved the 3 of us to a row where we could sit together, and went out of her way to find us a row with an empty seat (Ellis got a seat on the second flight, which was a miracle).

11. Man who carried our car seat on plane #2.

I honestly don't think I would have made it home without these angels. Thank Heaven for sending people to help us when we need it the most! I didn't ask a single favor of anyone. They just seemed to be placed in my path, and they all unabashedly offered to help, each one knowing exactly what I needed at that moment. If you're out there angels (or if you've ever been one to someone else), THANK YOU. You made my day.

Go Real Salt Lake!

Hey sports fans: I just wanted to get the word out that Real Salt Lake has made it to the Major League Soccer final! If you're saying to yourself, "Salt Lake has a professional soccer team?" (and I know some of you are!), that's okay! Now would be a great time to tune in to see if you're a soccer fan at heart! And, their opponent is the L.A. Galaxy, who have one David Beckham on their team, so everyone will have heard of at least one player on the field.

Really, though, soccer in the U.S. is getting a lot better, and it's only going to get bigger as time goes on. The U.S. National team has qualified for the World Cup, which will take place next summer in South Africa, and MLS is attracting more and more foreign talent to come play in America while more and more U.S. players are playing in the top European leagues as well. Why not give it a try? The big game is next Sunday, Nov. 22nd, at 8:30 EST (6:30 Mountain Time) on ESPN.

Also, for all of you who live in or visit Utah, I would highly recommend going to a game at Real's new stadium in Sandy. Jenn and I went this summer with her siblings and we had a great time (thanks for the tickets Mom and Dad!). Even Jenn liked it! Give it a try...

Halloween Festivities

Ask me this year, and I'll tell you I like Halloween. This is what I like about it:

• Getting to do whatever festive fall things I want to do.
• Pretending the inflatable jack-o-lanterns and purple-light-cobwebs do not exist.
• Instead, drinking in the height of the season and making a holiday of it!
• 70 degree weather (just cool enough to call it crisp).
• Trick-or-treating with friends. It's fun to be the group of parents watching the kids get so excited running from door to door. It's fun to hear all the people tell your kids how cute they look and then reward them with candy. And I got a kick out of Romney telling the kids, "At this house you have to do a dance to get the treats!" They really did it!

Here's what else I liked about Halloween this year:

guitar and donut night with Jonathan and Eliza

(mostly the donut part) Our raised donuts turned out great (here is the recipe)!

We also made pumpkin spice donuts -- a must try recipe! Mmmm hmmm!

Finally introducing Henry to his half-namesake: Henry David Thoreau. He was so excited to finally meet him! (we're still working on introducing him to Henry B. Eyring)

Watching Henry dance at "the Walden Pond"

Love that clear clear water

Walking around Walden Pond

Crunching all of the leaves

Managing to get lost while walking around the pond and taking a train track detour

You know, living deliberately.

The Great Pumpkin's Visit!

Well, the Great Pumpkin made it to our house this year with a bundle of Halloween surprises! It turned out to be a successful way to come to a decision about the costumes (okay, let's be honest: it was a successful way for me to choose the costumes I wanted, perhaps for the last time!).

I think Henry was pretty happy about the whole idea though. He acted really excited for several minutes, and then he got all wistful and said, "Maybe next year the Great Pumpkin will bring me a boxer costume!" I didn't even know boxer was his top choice in costumes! Maybe next year . . . Anyway, the Great Pumpkin also had this great idea of sending Henry a toy UPS truck in the mail, which made up for any disappointment Henry might have had. Who can complain when there's a new truck involved?

I may be biased, but I think these two boys are the cutest UPS guys I've ever seen!

Ben's great idea: Henry put his candy inside the Amazon box!

The truck turned out to be the perfect prop! Ellis just needed a little help keeping steady as we went trick-or-treating. It was so cute to see him pushing his deliveries along!