Call Our Offices
Your Money.
Your Life.
Your Way.
article
Christmas Shopping Lessons for Investors
Shared by Strong Valley on December 7, 2021
Image of a stop watch for the in-brief section heading
IN BRIEF
Here's a quick look at what's in this article:

There’s a generational cycle that is both fascinating and important to understand as an investor. Find out why it’s important to ask yourself, “Is that investment an innovation or an improvement on an existing product?” It could explain why today’s business environment seems flush with billionaires younger than 30.  It’s also helpful when you’re deciding to invest in the right new product – Facebook and not MySpace for instance.

Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

As Christmas sales loom, we face an endless array of sparkly, shiny and occasionally innovative items. As an investor, you run into a similar phenomenon that requires you to ask, “Are investment offerings truly innovative, or simply improvements to existing technologies and services?”

Creating new products is far from a sure thing, of course. In fact, a study of more than 500 executives revealed that while almost one in five rated innovation as a top strategic priority and two-thirds depend on innovation for long-term strategy success, many companies expressed disappointment in returns from investments in innovation.

That said, investing in the right innovation – Facebook and not Myspace, for instance – brings a bonanza. Companies widely acknowledge that new products drive real growth. Your best investment strategy may well be firms’ unceasing need to move forward.

The History of Your Future

Consider the book Generations: The History of America’s Future, published in 1991 and written by William Strauss and Neill Howe. Although it has nothing to do with investing and offered little economic insight, its messages can be extended to how we invest.

The book’s two primary messages: First, we tend to get along better with our grandparents than with our parents, or at least identify more closely with our grandparents’ beliefs and behaviors more than with than our parents’.

Second, each generation approaches development and discovery in a different manner from that of the preceding generation. One generation creates, and the next generation extends or improves on the innovation.

Innovation or Re-Gifting?

For example, folks born in the 1880s invented many things we use today, such as phones and radios. The next generation, born in the 1920s, largely improved everything they touched. The first generation made the cars, and the next added air conditioning, automatic transmissions and power windows.

Today, we see that baby boomers created many innovative technologies that affect how we communicate, such as cellphones and the Internet. The current young generation makes the boomers’ innovations better, faster, cheaper and more accessible. Suddenly, today’s business environment seems flush with billionaires younger than 30.

Many of these young and rich entrepreneurs made fortunes in relatively new technologies that didn’t exist when they were born: social networking, mobile applications and cloud-storage computing systems.

This phenomenon is both fascinating and important to understand as an investor. In years past, 20-somethings invented or improved, depending on their generation. These people were often older than 40 before their voices resonated in global markets and changed the world in general – and the business world especially.

The Big Money is in Innovation

Today, innovation, introduction and acceptance move at warp speed. Take cellphones, which Americans hang on to longer than in recent times but still replace (usually with an upgrade) less than every two years.

Changes range from easier access via emerging technologies to ripples in capital markets. Speed and change remain undeniable and important and increasingly harder to ignore for long.

Recollecting the frenzy of your recent Christmas shopping, did you notice the so-called new offerings, and ask yourself if they were improvements on existing products and services or true innovations?

The answer sheds light on the areas where financial resources flow. Do capital markets invest in areas that make televisions bigger and brighter? Absolutely.

Are manufacturers able to charge more for the products? It doesn’t appear so. The big money seems to be in innovations, particularly if you want to get wealthy before middle age.

Something to think about as we invest.

The information contained within is believed to be from reliable sources. However, its accurateness, completeness, and the opinions based thereon by the author are not guaranteed – no responsibility is assumed for omissions or errors. The views expressed herein reflect our judgment now and are subject to change without notice and may or may not be updated. Nothing in this document should be construed as investment, tax, financial, accounting, or legal advice. Each prospective investor must make their own evaluation and investigation of any investments considered or of any investment strategies described herein (including the risks and merits thereof), should seek professional advice for their particular circumstances, and should inform themselves as to the tax or other consequences of any investments or services considered or described herein. Please see other important disclosures related to StrongValley.com

Your turn – What would you like to know about Christmas Shopping Lessons for Investors?

Strong Valley wants to provide useful and meaningful information to our clients, to our professional network, and to the broader community of people we serve. We’d love to hear your questions about Christmas Shopping Lessons for Investors or about any other topics you care about. You can call our office directly, or use the contact form below to send us your questions and/or suggestions.  And if you found the information helpful or entertaining, we hope you'll share the Strong Valley story with others.

We love to hear your questions, ideas, and feedback!

  • This field is for validation purposes and should be left unchanged.
Copyright © 2019 Strong Valley Wealth & Pension, LLC
Investment advisory services offered through Laurel Wealth Advisors, Inc., a Registered Investment Adviser. Securities offered through Charles Schwab & Co., Inc. Member FINRA/SIPC. The information on this website has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority; registration as an Investment Adviser does not imply a certain level of skill or training. Please refer to “Important Disclosures & Disclaimers” for additional details. Strong Valley Wealth & Pension, LLC offers some securities through M.S. Howells & Co. Member FINRA/SIPC. M.S. Howells & Co. is not affiliated with Strong Valley Wealth & Pension.