Labor Day was signed into law as a federal holiday by President Grover Cleveland in 1894 to placate unions following a bloody and tumultuous strike at the Pullman Company. Today, the break on the first Monday of September is less about labor and more about recreation, cookouts, and the mental end of summer.
To some, labor merely is about a job or the lack thereof; for others, the concept of labor transcends a job. It’s about a career, economic stability for self and family, satisfaction and fulfillment, success, a sense of mission, a calling. Consider a young person attempting to think about a future of work that may span 50 to 60 years or more. How does one grasp a fast changing world to formulate a job or career strategy, and an investment strategy if one is to accumulate capital to fund their secure future?
As a member of the board of directors of a small but growing privately-held company, recently I participated in a “future think” planning session. What did we want the company to be, five, ten, and fifteen years hence?
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A senior executive of the firm recalled the effort to formulate a five year plan when he was in top management at a major Fortune 500 company. When the plan was completed, the CEO told his team, “If we execute this plan exactly as we have laid it out, in five years we will be out of business.”
Having deflated the egos of those who labored to produce a creative plan, he explained that the world and marketplace in five years will be totally different. If they did not modify and change the plan as they went along, they would be left behind, becoming obsolete and less and less profitable.
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We see an example in the stagnating stock price of Microsoft, one of the glowing success stories of the last century, now eclipsed by Apple and Google. Personal computer sales, the mainstay of Microsoft, are eroding as users switch to smartphones and tablets. Canada’s Research In Motion (RIM), was a global leader in wireless innovation, having revolutionized the mobile phone industry with the introduction of the BlackBerry in 1999. The company is on the ropes as the iPhone became the “must have.” Now, Samsung of Korea is gunning for Apple.
Sears for years was an appliance sales leader with its Kenmore brand. With recent weakness in sales, Home Depot, Lowe’s, and a host of other competitors have cut into Sears’ profits. J.C. Penney has struggled for several years with unsuccessful “makeovers.”
The message? Flexibility counts. Anticipating change counts, with Plan B or even C at the ready. A plan, whether a career plan, a financial plan, or a life transitions plan, is road map. Every road is subject to disruption, detours, potential dead ends, and rabbit trails. Yes, you want a concept of where you will be in one, five, ten years and beyond. But any plan must be dynamic, fluid, adaptable. You cannot set it and forget it.
Every money manager has a turnover ratio, on average selling a certain percentage of stocks every year. Stock buys may disappoint and under-perform. Other stocks may reach a targeted sell point and be sold in favor of a better bargain.
Asset classes may under-perform or outperform in the short run and then change direction. Assumptions may appear wrong near term while being sound in the long run. Diversification is important as crystal balls are fallible.
Everyone, whether a breadwinner, a stay-at-home parent, a retiree, an investor, should have a contingency plan to deal with personal setbacks, career reverses, and market disruptions because “stuff happens.” Change is the only constant. Well, death and taxes, also. Have you reviewed your “what if?” plans lately?
Labor Day signals that the 4th quarter is less than a month away. Have you reviewed your 2013 tax strategy? Already we hear of end-of-year Christmas and holiday promotions. Have you started planning for 2014?
May your labors be fruitful!
Lewis Walker is President of Walker Capital Management LLC. and Walker Capital Advisory Services, Inc., a Registered Investment Advisor (R.I.A.) Securities and certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with the Walker Capital Companies. ▪ 3930 East Jones Bridge Road ▪ Suite 150 ▪ Peachtree Corners, GA 30092 ▪ 770-441-2603 ▪ lewisw@theinvestmentcoach.com