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Daddy Duty is written by Richard Harris, publisher of The Tri-County Journal & Chattahoochee Chronicle.
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'Brown Chip' Investment Plant
Every time I turned on the television news I heard details of how the stock market was so bullish that all you had to do to make a ton of money was invest a small amount then sit back and enjoy the ride.
The explosion of the internet coinciding with the rapidly rising stock market made the situation even worse, as I had to watch hundreds of commercials about on-line trading. Companies like AmeriTrade told the public that John Doe and Bubba Smith didn't even need to worry about hiring stock brokers anymore. They could simply log on to the internet and invest on their own with no special training and relatively little research.
However, if you've turned on the television news recently you know that the Wall Street boom may be going bust. The once hallowed technology stocks are plummeting, a Japanese collapse threatens to drag down the world economy, and many who support President Bush's huge tax cut package say the cuts likely aren't big enough to rally the market.
At first I took great personal satisfaction in the situation, figuring that rather than procrastination keeping me away from investing, I simply had some keen business sense hidden in the farthest recesses of my mind. I thought of the proven age-old edict "if it seems too good to be true, it probably is".
Then I thought about the fact that I'm a new dad and like all of the dads who have gone before me, I have already developed the universal desire of not only adequately providing for my child, but striving to make his life as best as possible. So, my mind once again turned to investing as something that I should be interested in.
Now after much thought (I swear I've been mulling this over at least since five minutes before I started writing this column) I have come up with a foolproof investment plan. I developed the plan by brainstorming and writing down everything I know about
My first bit of knowledge is the uncanny fact that the words "stock" and "stork" are separated by only one letter Ð thus the birth of my "R for C" plan, also know as "the stork scheme". Most untrained investors would skip over this fact as mere coincidence, but not me. It’s got to be an omen.
While many companies' stock prices fall due to unforeseen changes in the demand for their products, I'd say it's a pretty safe bet that the demand for baby products isn't headed for a free-fall any time soon. The baby boom started with Adam and Eve's kids and the market has been expanding ever since Ð now into the billions. I doubt you can name me any other market that's had such steady growth.
The second piece of knowledge from my brainstorming session is that all good investors have at least a couple of top notch "blue chip" stocks in their portfolio. To keep with my stork theme, I've come up with some "brown chips" to act as my anchor stocks. These are the companies that sell "Pampers" and "Huggies" and I call them my "brown chips" because, well, I'm sure you can figure it out.
Anybody who has ever had an infant knows that these brown chip companies churn out a lot of their products, as babies need to have their diapers changed about 75,000 times per day. Okay, maybe it's only about a dozen times, but it seems like 75,000. At any rate, they shouldn't have any trouble moving their inventory.
The final piece of knowledge I came up with is that all wise investors also have a diverse portfolio, which spreads the risk, thereby minimizing the odds of losing money if one particular company tanks. To achieve this in the stork scheme you simply invest the rest of your money in every baby-related company you can think of, from Fisher Price, makers of items such as the "Slumbertime Soother", to Safety First, makers of baby monitors and baby bath stations.
So, for those of you who, like me, have been waiting on a reliable investing plan before venturing onto Wall Street to secure your family’s financial future, feel free to use my new stork scheme. ... Just don't come to me crying like a baby if it doesn't work.