Investment Strategies with Aileron

By: Bill and Cindi Porter, AILERON INVESTMENT ADVISORS

Q: Are there any new tools for investing in the stock market?

A: Yes, there are many. Let’s discuss one that is sometimes overlooked.

In the 1990s, personal computers introduced the ability for any individual to produce top-quality word processing. Typewriters, white-out, and replacement typing ribbon soon became obsolete and so did the companies that made them. The stocks of those companies were devastated because new technology tossed their products into the historical trash bin of the “no longer needed” items. Not anticipating the effects of new innovation, new merchandising methods, and new consumer demands may leave an investor with some worthless stock certificates which had once been valuable.

A possible current example would be Avon. After manufacturing women’s cosmetics and marketing their products with direct salespeople for more than 100 years, this past summer Avon sold its last remaining factory to a French competitor. Avon, who once had a sales force of over 200,000, failed to update its products, develop an online strategy, or capitalize on social media.

In the same way, Sears, which was founded in 1892, was once an incredible merchandising behemoth. After failing to adjust for the times, however, it is now desperately struggling to avoid bankruptcy. The point is that analyzing the future prospects of a company (or an entire industry) in regard to becoming irrelevant is now a required new metric for a successful investor.

Consider the fallout from iPhones and its effect on the manufacturers of flashlights, alarm clocks, cameras, newspapers, calculators, telephone books, cassette recorders, landline telephones, etc. Similarly, Amazon is replacing the entire concept of shopping at the mall. All investments involve some type of risk. Obsolescence is now a much more prevalent risk than ever before.

What is next? That is a conversation to have with your trusted advisor — probably sooner rather than later.

 

This is for education only. Before using this information in any way discuss it with a financial professional. There are many risks associated with stock trading. You may lose some or all of your financial investment. Securities offered through Dempsey Lord Smith, LLC Member FINRA/SIPC. Securities offered through Integrated Financial Planning Member FINRA/SIPC. Advisory services offered through Dempsey Lord Smith, LLC. All the information in this letter is published in good faith and for general information purposes only. We do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information is strictly at your own risk.

Send your investment questions to: submissions@SuwaneeMagazine.com.

All the information in this letter is published in good faith and for general information purposes only. We do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information is strictly at your own risk.


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