The article “The School Bus Technique” was written by Lee 10 years ago! It was featured in The Envisionary – Q1 – 2012 and was the 68th Envisionary written. We still find the information valuable and timely. We’d be curious to know if any of you remember this article. Let us know!
Many mornings on the way to work, I find myself following behind a school bus. You know, stopping every seventy-five feet to pick up children, just when you are in a hurry. Then again, it’s usually such a friendly situation; parents standing there with coffee making sure their kids get on, and maybe a friendly wave from the driver.
Anyway, there’s something I’ve noticed over the years. At first glance, they are the same big old yellow machines that have been around forever. But when one looks closer, there have been some changes which have been fairly significant. Some buses now have lights on their roofs, kind of like the old police cars. Some also have a florescent white strip on their roofs. Many have orange sticker material around the back door, and on various parts of the sides. I have thought to myself that you could probably see one of these things from space if the light hit it correctly. Maybe 3M is using our buses as a test for something.
My initial thoughts on the subject were that it was overkill. Why waste the money? After all, these buses are very large, made of steel, and have done a good job protecting our children for generations. Why now? This, combined with the fact that the skills of an excellent driver would be most important. However, the world does continue to change. Traffic has increased significantly. Buses are being used for more and various things such as sports, day trips, etc. Obviously, it is being done in the interest of child safety. Maybe it just makes sense.
Now that I have professed myself as both a traffic and safety engineer, allow me to explain why in the world this topic should be covered by a wealth management firm. Simple. Tried and tested is most important but taking advantage of positive advancements along the way can make a solid combination for success. Read on.
When one thinks about successful long-term investing in its purest sense, there are basic building blocks that must be in place. Among these are diversification, time and patience, discipline, and an understanding of your plan. While we may be almost bored with hearing about these market principles, investing without them is like building a fort in a dead tree. It might work for a while, but eventually, it will fall to the ground.
While we have determined that there are time tested principles, that doesn’t mean we invest the same way as we did fifty years ago. Back then, access to markets was limited. Today, we can increase diversification to manage risk through markets around the globe, by owning many different asset classes.
Many investors today try to replace the time-tested principles of investing with the newest enhancements. While these enhancements are built to directly address fast-moving changes to our world, they are not substitutes for diversification, or time in the market. It is uniquely the combination of our base structure, combined with these advancements which makes for opportunities. Never confuse that.
We live a few blocks from a bus garage. Each morning, around 6:30 a.m. you can see the drivers out there. They are checking their oil, turn signals, and preparing for the safety of our children. Imagine what would happen if they decided that they weren’t going to do that part of their job anymore. In the end, the school bus people got it right. They still run those strong, diesel burning machines. Yet, they combined the best of the past with the latest advancements in technology... even if it is for the benefit of astronauts. And so it goes with investing.
Investing involves risk. No investment strategy can guarantee positive results. Loss, including loss of principal, may occur. Material discussed is meant to provide general information and it is not to be construed as specific investment, tax or legal advice. Keep in mind that current and historical facts may not be indicative of future results. Diversification is an investment strategy that can help manage risk within a portfolio, but it does not guarantee profits or protect against loss in declining markets.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. (C) Twenty Over Ten