Southern Springs Insights

 

Investment is Ownership – Getting Started in the Stock Market
June 9, 2020

By David Jackson, MBA, CFP®, C(K)P™ Managing Partner - Investments, SSCG

Over the years, I have been asked to speak to many groups and individuals on getting started and the basics of investing. I have also been asked by many clients if I would offer some insights with their children or grandchildren. (Martin and I are always happy to have those conversations, and if you would ever like to schedule those discussions, please let us know.)

When I deliver these presentations, I don’t actually spend that much time talking about the stock market. Instead, I spend a lot of time talking about ownership. If someone wants to become wealthy in our country, the path to that wealth usually involves ownership. 

If a piece of real estate goes up in value (which most tend to do over time), it is the owner, not the renter, that gets the benefit of that appreciation. If a business goes up in value, it is the owner that gets most of the benefit of that appreciation. If a publicly traded company goes up in value, it is the shareholder that gets the benefit of that appreciation. And the shareholder of that company gets the benefit of the shares going up, regardless of the shareholders gender, skin color, education level, etc. Anyone that owns a stock that goes up gets the same benefit of that stock going up. 

While the concept of ownership doesn’t always seem that complex, it’s something that really isn’t taught in school for the most part, and actually eludes many otherwise intelligent people for most of their lives. There are a lot of pundits who talk about the concentration of wealth in our society. People can debate if that concentration is good or bad, but one of the primary reasons that wealth is concentrated is because a small number of people truly grasp the concept of ownership as a means toward wealth. 

If I go to any small town, I can almost always guarantee that there will be a handful of people in that community who seem to own everything. They buy up every piece of real estate they can get their hands on. They are serial entrepreneurs, or they seem to own a piece of several businesses. In short, they are willing to embrace the risks and rewards of ownership.

Now, I always have to remind people that ownership is not a guarantee of wealth. You can start a business that fails. You can buy real estate that loses value. Not everyone makes a profit on every stock that they purchase. Not every author’s book becomes a best seller. However, most wealth tends to flow to the owner or owners when something is successful. 

Not everyone is going to write a book, buy land or start a business from scratch. But everyone can be an investor in some way. And for most successful investors, that usually involves ownership in successful companies. Almost anyone can be an investor in successful public companies. The earlier I can start with that person, the greater their chance of success. 

If you know someone that needs to have that conversation, we are here to help them. 

Any opinions are those of Southern Springs Capital and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Individual investor's results will vary. Past performance does not guarantee future results. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA / SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Southern Springs Capital Group is not a registered broker/dealer, and is independent of Raymond James Financial Services.



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