Investment and Diversification
2008
With the seemingly never-ending bad news coming out of Wall Street and the banking industry, it’s a great time to review the value of diversification, but not just in finances. Certainly the lessons of not diversifying are hard learned particularly in these financial times, but here’s a glimmer of good news. Financial pundits claim that markets go in 10-year cycles, and in reverse Newtonian logic, what goes down will again go up. As NAPL’s economists note in the October 8 post of NAPLBizTrends.
"Although economic recovery may not be on anyone’s radar screen, it will at some point begin to make an appearance."
The bigger question may be when the economy comes back, will you be positioned to enjoy the fruits of the recovery? Do you have the right customers, talents or business base? Just over ten years ago, industry wisdom was to specialize and come out of the world of "general commercial" printing and into the world of niche marketing. The analogies were always made to the medical world, where the days of the general practicitioner were long gone, and the era of the specialist was upon us. But, if you had a majority of your business in the real estate, or the financial markets, that wisdom doesn’t seem so wise in retrospect.
Niche marketing is still valid, but likely the lesson of the times is to have a degree of diversification in terms of talents, customers and market bases. The lesson is one not just for companies, but for individuals as well. In today’s world of lean operations, the employee who has a strong specialty but is also flexible and capable to do many things is the one most valued and most secure in an otherwise insecure world. The person who is a great manager, financially savvy, plus a solid technician has three times the value of either just a great technician or a great people person. It’s the new world of multi-tasking, multi-talenting and just plain diversification in all walks of business life. Pie chart yourself and determine what percentage of your talents or skills fall in various categories and then determine if you are, in fact, correctly diversified or diversifed enough.
Rumor has it that ,at least locally in the NY area, graduate schools and various degree programs are being flooded with applications from ex-Wall Streeters going back to school for extra credentials rather than attempting to beat the streets. They are banking on a better or equal job tomorrow rather than any old job today. Their goal is to invest in themsevles, diversify their talents and build credibility for when the job market eases. I’m sure this strategy is only true for the few who have a healthy savings to tide them over, but the lesson is to continue investing both in yourself and your business.
~ Rhona
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