Tires: the most important components on your vehicle (edited 10 January 2022)

THE MOST IMPORTANT COMPONENTS
If asked what they think the most important components on their vehicle are, most people will answer 'the engine' or 'the engine and the transmission' or 'the brakes'. I would argue that the most important components on any vehicle are the tires, and specifically the four tiny contact patches (or two on a motorcycle) on the tires that touch the road. Why? Because any input - acceleration, braking, steering - go through these four tiny contact patches. Here is a link to the subject of The Tire Contact Patch at the Vehicle Dynamics Institute.

ORIGINAL EQUIPMENT (the tires that came with your new vehicle)
Have you recently bought a new car, or are you in the market for one? Then you should know that Original Equipment (OE) tires, the tires your automobile manufacturer put on your new vehicle are usually CRAP - they're noisy, harsh-riding, short-lived, and poor-handling, especially in wet weather and snow. 

For example, let's say you recently purchased a new 2022 Honda Pilot EX-L AWD. The tire size is 245/60-18 and according to TireRack.com the OE tire is a Bridgestone Dueler H/P Sport AS which is a Crossover/SUV Touring All-Season tire, a light truck tire. This tire gets 3 out of 5 stars from TireRack users. So, how good is it?

Click this link for the Crossover/SUV Touring All-Season tires survey by TireRack customers. Notice that the Bridgestone Dueler H/P Sport AS tire ranks close to the bottom of this table.

You would never buy these tires at retail as replacement tires. What would you buy? Well, one of my favorites is the Grand Touring All-Season tire which is a passenger vehicle tire.

If you're a Costco customer, the simplest thing to do is to use TireRack to find BFGoodrich, Bridgestone and Michelin tires available at Costco for your vehicle. There are several Grand Touring All-Season tires to choose from, and my favorite is the Michelin CrossClimate2.

SIPING
So, what can you do about the mediocre Original Equipment tires that you have on your new car? Well, you have three choices: (1) live with them until you wear them out, (2) replace them immediately with good tires, or (3) for $80 or so have them dynamically balanced and siped. Siping improves quietness, tread wear and handling. I would NOT sipe high-quality replacement tires because (1) it will void the warranty and (2) the tires don't need it, but I usually sipe the Original Equipment tires when I buy a new car. Here is the link to Les Schwab for siping information.

The two kinds of market losses we can incur...

In any market, there are only two kinds of losses we can incur... loss of capital and loss of opportunity.

In other words, we can lose part or all of our capital (investment) by being IN the market when we should be OUT OF the market, or we can lose out on the opportunity to make a profit on our investment by being OUT OF the market when we should be IN the market. 

Personally, I would rather be OUT of the market wishing I were in, than IN the market wishing I were out.

To paraphrase Will Rogers: The return OF my investment is more important than any return ON my investment.

A financial advisor who always urged his clients to remain fully invested in the market once observed that, since 1900, there has never been an eighteen-year period in which the stock market did not fully recover its loss. The classic example is the 1929 stock market crash which did not recover until 1947, eighteen years later.

This brings up an interesting point. The two most important things we need to know about ourselves before investing are: (1) our tolerance for risk, and (2) our time horizon. If we are young, taking on risk is not a problem because we have time to wait for a market recovery. If we are retired, we may not have an eighteen-year time horizon to wait for a market recovery, so we are forced to become more conservative in our investment philosophy.