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January 7, 2012

Individual investors like corporations need to make hard choices.

I realized when reading Spencer E. Ante’s article, “Avoiding Innovation’s Terrible Toll”, in today’s Wall Street Journal that the attributes of corporations that have survived the longest are the same as individual investors need to meet their goals.  A recent study indicated that only a small fraction of corporations survive for 40 years.  The study looked at more than six million firms.
From my perspective, the corporations that endure were able to make sense of a changing world.  As a financial planner I help my clients recognize change is inevitable.  That is the first step in helping them make sense of a changing and complex world.  
Changes may be in someones personal situation, in local, national and/or international economies, in local, national and/or international politics, natural disasters, and an infinite number of other factors. Recognizing how these changes impact them may indicate that they need to make changes.  Not all changes require changes.  Individuals must recognize the changes and determine if the do or could impact their ability to achieve their goals.  They must ask hard questions and make the hard choices.
“Luck plays an enormousrole in every investment or corporate story for success” is the last sentence of the article.   A CEO of a very successful company, many years ago, told me that he owed his success to serendipity.  Merriam-Webster.com defines serendipity as “…the faculty or phenonmenon of finding valuable or agreeable things not sought for”.  My observations since then was that certain people seemed to be luckier than others.  They seem to put themselves in a position to take advantage of situations that others did not see.  These are the people that recognize change, or the need to change and how the change could impact them.
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