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Jack Falvey's Investor Education Briefs: Global finances shift a little bit each day

By JACK FALVEY
October 22. 2017 10:33PM


We know our Earth moves through space. Astronomers tell us that as a member of our galaxy we are traveling at 1.3 million miles per hour.

Geologists further tell us that the continental drift of the Earth’s tectonic plates continues to this day at about 3 centimeters per year. This is about the speed of the growth of your thumbnail.

Somewhere between these two speeds our global economy advances. It is good to know about space travel and to understand the origins of earthquakes, but it is vital to understand that the global economy and our financial worth are in constant motion. We ride on the Earth, our continent, and on an economic ship as well.

The textile industry moved from Manchester, England, to Manchester, N.H., then to the South, and then on to the Far East. Economic growth shifted at each move. The computer industry moved from the Hudson River Valley to Silicon Valley. The energy industry moved from Pennsylvania to the Middle East and now back to the Dakotas.

Notice the speed of economic movement is not galactic or tectonic. It is visible and noticeable to all who are observant. You must be observant. You do not have to be ahead of all this movement, but you can’t get too far behind. Your risk tolerance, as always, will determine your position and movement.

We are told that brick-and-mortar stores and the book business are in transition. If you are invested in a business that is in both categories, your risk increases. If you are invested in a new-wave social media company, your risk may be even greater in the shakeout of winners and losers to come. The trends are not difficult to see. What to do about them and when to do it will always be the questions.

Doing nothing is a retrograde decision in a moving environment. Buy and hold is a valid strategy within time constraints. What is the time period? Everything is in motion. Keep an eye on the drift of things and decide how best to go with the flow of our economy. Recognize motion. Keep looking out the economic window. Check the economic weather daily. There is a lot to see.

Jack Falvey is a frequent contributor to the Union Leader, Barron’s and The Wall Street Journal. He can be contacted at Jack@Falvey.org.


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