What you want in life could become your path to financial wins in the market. Hilary Kramer, author of Ahead of the Curve: Nine Simple Ways to Create Wealth by Spotting Stock Trends , illustrates how armchair visionaries can invest for profit.
What do you wish you could have, if you could have anything in the world? What do you crave? What would make your life easier? Thinking this way can lead you to obvious answers and to some less obvious answers — and they can help you identify trends before they even start.
Just as you don’t need to be a mathematical genius to study the stats that can help you invest, you don’t need to be a massively creative person to use your imagination in this way. The other morning, I got together with a financially struggling (and I might add, rather high-strung) friend of mine at Starbucks. As I was stirring sugar into my latte, and rather presumptuously giving her pointers on how she might get out of debt, she suddenly blurted out, “But you’re so lucky! Everything you touch turns to gold.” She proceeded to tell me that I clearly was born to make money, while she was born to lose it.
I assured my friend that she was wrong: First of all, I’ve invested in my fair share of big duds along the line. Second of all, no one is born to get rich or born to be poor. We all have an equal shot at making money from the market.
“Be a dreamer,” I told my friend.
She scoffed, “With the amount of time I spend dreaming of making money, I should have been filthy rich a long time ago!” I explained that I didn’t mean dreaming about money. We all do that, usually in the context of worrying. What I meant was thinking about the everyday world in a different way. Imagination can open your eyes wide to the opportunity all around you at any given moment — and can allow you to cash in at the end of the day. With imagination, you can sometimes jump on trends before they are officially trends, especially if you keep your imagination ticking while you are running errands, reading the newspaper, taking the kids to school, attending work meetings; all the time.
I pointed to the Starbucks cup in her hand by way of example. “Take Howard Schultz, the genius behind Starbucks,” I said. “You might think it doesn’t take imagination to start a coffee shop, but take it a few steps further, as Schultz did, and you are onto something.” In the ’80s and early ’90s, Schultz saw that Americans were always on the go and they desperately wanted two things. One, they sought an affordable indulgence that would feel like a reward for their stressful lives. Even a $4 latte is cheap enough for many people to splurge on every day without feeling too guilty. Two, they craved a place to relax. So he provided them with a home away from home where they could indulge themselves. It was so simple: he saw a market hole and created a way to fill it. His creativity plus execution led to innovation, which is the hallmark of companies that can develop or capitalize on trends.
You could have capitalized on having the imagination and vision of Howard Schultz — by buying stock in his Starbucks! What if you had shared his vision, and bought shares of Starbucks when it first went public in 1992? If you had invested just $1 on that first day, you would have roughly $55 dollars today. If you invested $1,000 on that day, it would be worth around $55,000 today. I’d call that a healthy return.
So you don’t need to have a creative writing or fine arts degree to have an imagination for present and future trends.
ABOUT THE AUTHOR
Hilary Kramer, a global investment specialist and author of Ahead of the Curve: Nine Simple Ways to Create Wealth by Spotting Stock Trends (Copyright © 2007 by Hilary Kramer), is the former Finance Editor of AOL and also serves as the AOL Money Coach. Her expertise in investing spans more than twenty years of experience in equity research, asset allocation, and portfolio management. She graduated from the Wharton School with an MBA, and within a decade she was recognized as one of the best equity investors on Wall Street and had amassed a personal fortune of more than $10 million. She has since then devoted her energies to helping individual investors apply the simple secrets that she used to bring her wealth and freedom from financial worries. She appears regularly as a commentator on the Nightly Business Report on PBS and has provided market commentary to The Wall Street Journal, Fox News Channel, ABC, Bloomberg, and CNBC, among others. Hilary also appears daily on the nationally syndicated radio show Doug Stephan’s Good Day. She has held directorships in both NYSE- and NASDAQ-traded companies and, from 1994 to 2002, was the senior managing director of a $5.2 billion global investment fund with both private equity and publicly traded securities.
MORE ARTICLES BY THE AUTHOR
- Read Chapter 1 of Ahead of the Curve: Nine Simple Ways to Create Wealth by Spotting Stock Trends
- See the book’s Table of Contents