One of my projects outside BUYandHOLD centers on a statistical study of about fifty families who came to this country as a refugee group over two centuries ago. One result from this study reveals that the life span between two generations in this group could cover a century or more if a parent and a child remained healthy within a relatively safe environment. While this result may seem ho-hum, few if any family researchers have discussed how this result could create impacts on ideas about long-term issues such as investment strategies.

I'll bring this result closer to home: Say that you were born in 1980 and that you gave birth to one child in 2000, when you were 20-years-old. Since the average life expectancy for humans in the U.S. these days equals 77 years, you could live to the year 2057. Your child - based on that same lifespan average - could live until 2077. The difference, then, between 1980 and 2077 equals 97 years - almost a full century.

Based on that equation, I wondered what exactly a "long-term investment" meant if I placed that phrase within a span of a century. I began to search for companies that were created a century or so ago which still survive today. I typed "century-old company" into my favorite search engine. The results surprised me because I felt skeptical about the search results. A number of these businesses weren't public (meaning that they aren't listed on any stock exchange). Additionally, some of the century-old businesses are scribbled on my "do not even think about dropping one dime here" list, because current world financial and business environments create questions about longevities.

Of course, I realized that this search was more of a fuzzy logic game and not the way to search for long-term businesses (which is through the library or through the actual company). Name changes, acquisitions, and even keywords omitted from web page codes could eliminate some viable choices?but I couldn't stop myself. I broke the century in half and typed, "fifty-year-old company" into the search engine to see what would pop up. The companies that came up this time seemed more appropriate to current world markets, but only because they seemed more familiar to me.

I carried this very unscientific search further in a search for twenty-five-year-old companies, and then for companies, which were created a decade ago. This game left me with the feeling that fifty- to ten-year-old searches seem most appropriate for current investment strategies because: 1) companies listed from the searches for fifty- to ten-year-old companies seem more familiar, and familiarity with a company and its product or service is a good key point in many investment strategies, and; 2) I could envision some of these companies as survivors for at least another decade or more in the future. But, the idea that the younger the company the better their chances for survival is an idea based - once again - on faulty logic, because "young" means more than chronological age (like I'm young at heart but my mirror doesn't reflect this image).

The plus side to the time I spent on this search made me question how the results could improve my real-time investment goals. This game prompted me to commit to a yearly check-up on my investment strategy (just as a yearly physical check-up is important for health reasons in real life). Additionally, I learned that I need to pay more attention to all my portfolio choices because risk factors influence longevity. All life expectancies - human and otherwise - are affected by environments, events, and other equally unpredictable factors. This game also provided me with some interesting choices which merit more reliable research. If those companies lasted for several decades (or even a century or more), I want to know what makes them tick!

At this point I thought about the story my investment-savvy father told me when I was young: "They found some old stocks in the attic trunk," he stated, "And they were worth a mint!" I don't know about you, but I doubted this story's credence when I considered the many risks and opportunities provided within a two-generation century-long life span. However, some stocks that my grandparents considered during their young adulthood are still active and worth much more now than they were at the time of purchase. Alternately, I thought about some companies that entered the stock market within the past decade. Quite a few businesses created within that time frame are thriving and worth a look as well.

My father tried to instill the value of long-term investment strategies into my young and malleable mind with that story about long-lost treasures, and his efforts weren't totally lost on me. So, while I know that most of my long-term investment choices won't be covered by spider-webs and attic dust when my daughter receives her legacy (mainly because my portfolio is online and not in the attic), I know that a healthy balance between very long-term and immediate long-term investments is important to the creation of a diversified portfolio.

The next problem, then, involves how to recognize new investment opportunities. Over the next week or so I'll drag Cora from her schoolwork (as if I have to force her!) to help me find ways to improve our skills in this arena. Games, of course, are included in this search, because children and teens seem to learn quickly when they're absorbed with something fun rather than with something that bores them to tears. Since gift-giving time is just around the corner, we'll suggest some ideas for your family. Who knows? You might create a financial visionary who will take care of you well before you turn 100.

Until Then,
Linda Goin