Investment Strategies in the Sales Department

Standard & Poor's ratings echo in the distance, Wall Street rumblings rattle through our minds and media financial folks broadcast investment strategy to the point of nausea. These tidbits of mental torment cause blood pressure to soar — and they cause us to once more revisit our investment strategy. When my arteries feel the hypertensive squeeze, and my vision starts to blur, I make a call to my friendly financial advisor. He reminds me of the value of a sound investment strategy. Let me explain.

Years ago, I handled my own investments. I was a kid of 26 or so; I had this notion that I was smarter than anyone on the planet. I had read the business news since I was in junior high. I understood technology. Heck, I was a computer engineer — how could anyone be smarter than me? And, back then very few people were actually investing in the stock market. So I made lots of mistakes, made some money, lost some money and didn't really make any progress.

Then my financial advisor suggested I think about investing in a whole new way — a balanced portfolio. I realize many of you are thinking, “Gosh, that seems kind of elementary,” but for me it was a new concept. The idea of dividing investments amongst different stocks for building growth and minimizing risk over time has been around for a very long time.

Think about your investments — the ideal balanced portfolio means you have interests that grow slowly with minimal risk, others with high risk and massive rewards and maybe a few that generate dividends year after year with little room for growth. I believe we need to apply a similar strategy to the accounts we serve. Let's talk about how this strategy might work.

The Long Haul Investment

First, let's look at the Warren Buffet-style investment. The old Oracle of Omaha is fond of saying, “If the business is sound, why worry about fluctuations in the market?” He owns shares in companies whose place in the market is sound over the long haul. American classics like Coca-Cola and Dairy Queen fall into this category. They are destined to be in business for a long time with little overall risk.

It makes good sense for every company's sales department to invest in these long-haul players. Here are their characteristics: The customer organization has a solid place in their own market. They enjoy a sound financial position. Over time, you have built up an annuity in this account — they view you as a solid contributor to their organization. And you receive a steady stream of orders from them. You enjoy their business, and realistically they are essential to your long-term success but the room for growth is limited.

Special projects might come along but over the long haul, this type of account is likely to be stable with only modest increase, which tracks along with their own growth.