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On the Third Hand: If You Have Your Health

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My grandmother, Dorothy Bell, loved stocks, had crushes on various CNBC newscasters when she was well into her late 80s, and had memorized all of the New York Stock Exchange and American Stock Exchange stock symbols, and most of the Nasdaq stock symbols.

Her favorite bit of investment advice was, “Blue chips, blue chips, blue chips.”

Another of her favorite bits of investment advice was for people to take good care of themselves. “Even if you’ve lost everything, at least you have your health,” she’d say. “If you don’t have your health, you don’t have anything.”

That lesson came back today as I was reading an article by Liz Alderman and Susanne Craig on the front page of the late edition of the New York Times.

The headline is about how European banks bought what seemed to be extremely safe bonds issued by big countries in the euro zone.

The banks thought the bonds came with ironclad guarantees, but the news that Greek is likely to default and Italy is reeling suggests that those guarantees were an illusion, the reporters write.

The reporters quote Herve Hannoun, deputy director general of the Bank for International Settlements, Basel, Switzerland, as saying, “Sovereign debt has lost its apparent risk-free status.”

One reason that my grandmother emphasized the importance of good health is basic commonsense.

But another is that her parents were born in Shumsk, in what is now Ukraine, in an area so beset by revolutions and wars that it’s not easy to know what country the town is in now, or what town it was in when her relatives lived there. Were they in Ukraine, Russia, Poland or Lithuania? At various times, they were in all of those countries.

Banks rose and fell, fortunes rose and fell. Someone could do well one year, and see the government or natural disaster take everything away.

Millions fled before the start of the first world war with little more than what they could fit in a suitcase.

Then the people my grandmother knew settled in the humdrum Midwest, worked hard, built up little nest eggs – and ran into the Great Depression. All manner of upheaval.

One interesting point is that sensible people who hung on, saved regularly and diversified eventually seemed to do very well for themselves in spite of the Depression. The kinds of habits that led them to keep paying regularly on what may well have been overpriced industrial life insurance policies helped them prosper, whether the life policies were good buys or not.

Another interesting point is that good health is the kind of asset that kept on yielding through all the ups and downs.

When health insurers and employers invest in wellness programs, and life, long-term care and disability insurers apply underwriting standards that may persuade some to try to live healthier lives, they’re doing their best to help make consumers richer in a way that the consumers may not appreciate but really, truly counts.

On the one hand: If only my grandmother had done a better job of taking her own advice and had just bought a pot of IBM stock in, say, 1950 and kept reinvesting the dividends.

On the other hand: Because she stayed healthy, she got to live it up till she was 91. She went out partying.

On the third hand: Whatever the future holds, it would be great to face it with a pain-free stomach, a pain-free head and overall good health.