Companies, Stocks, Markets, Economies – that’s a title that encapsulates a lot. Those four terms are distinct, yet they’re frequently treated as synonyms. No, they don’t mean the same thing; which is good news because bad news for one is not necessarily bad news for the rest. That’s handy to keep in mind when the financial world is acting weird. 

For those new to this blog, here’s a reminder that this blog is based on my book about my personal finances, Dream. Invest. Live. (Hmm. Looks like Amazon found a way to force a link and a graphic that I didn’t intend. I guess I’ll leave it rather than break something by trying to remove it.)

I’ll emphasize, this my, my own, my personal finance strategy. It is how I look at things. This is Not advice. I hope the SEC understands the distinction.

Companies are not stocks, but some companies have stocks.

Stocks make up markets, but many stocks have almost no effect on the markets.

Markets influence economies, but markets only represent a part of the economy.

So, a bad economy may mean a bad market which may mean bad news for stocks which may mean bad news for companies.

But, companies are in business. They’re busy, as in busi-ness.

Stocks are priced by people who decide to buy or sell or hold. Investors and stockholders disagree by design. If someone sold a stock, then someone bought that stock – possibly regardless of the company or the market.

Markets are ill-defined, so the news tends to concentrate on a few names, essentially brands; e.g. Dow, S&P, NASDAQ, etc. Even those names can represent many things because each has sub-markets: Industrials, commodities, etc.

An economy supposedly covers all the monetary activity for a country or region; but while my personal finances are part of a global economy it shouldn’t be a surprise that the global economy can have a fine day while my day was – troublesome. And the opposite is possible.

Trying to keep track of all of that can give a person a headache, at least. Pardon me as I pop a few more ibuprofen.

My life is complicated enough that I simplify this part of it by going back to basics, back to the beginning of this maelstrom. I invest in companies by buying stocks. The economy may not know where it’s going. The markets can be confused. The stocks can be driven by irrational pessimism or irrational optimism or apathy. My companies, however, are groups of people showing up for work, trying to meet deadlines, launch products, sell goods or services, and generally keep their jobs. For me, that’s easier to understand and easier to track. Note, I used ‘easier’ not ‘easy’. But understanding the whims of the stockholders, the enormity of the markets, and the swings in economies is much more difficult to understand.

It is June. For the last decade or so I have conducted personal, semi-annual portfolio reviews at the end of June and the end of December. It is time to update it. I’ll do so more meticulously by the end of the month, but while chaos seems to be building I’m keeping in mind that:

• Geron is making progress on their telomerase treatments for cancer,
• Lineage Cell Therapeutics is making progress on their spinal cord repair treatment,
• MicroVision is making progress on their LiDAR system for autonomous vehicles,
• Electrameccanica is selling their electric vehicle, and
• Solar Windows is making progress on producing transparent solar cells for windows. 

No mention of the markets or the economies required. They all can influence each other, but meeting unmet needs tends to attract attention, regardless of the market or economic news.

Small companies are affected by stock swings, market swings, and swings in the economy; but their value tends to be in their products. Large companies drive the markets and can be swung by economic topics, but small companies can’t get distracted by those issues. Small companies have simpler goals, simpler resources, and can have clearer ways to measure their progress.

The downside to small companies is that they are inherently more fragile and riskier. They don’t have the buffers and diversity of a Microsoft. Microsoft has had several products fail; yet remains successful. When a small company only has one product, a failure in that product is catastrophic.

The upside to small companies, especially overlooked or besieged small companies is that their successes can be amplified. A $100,000,000 sale for Microsoft may not get much of a mention and may not move the stock, but that same size sale can turn a small company into headline news, and the stock can rise dramatically. (Details of three personal successes and three personal failures are in my book. Dream. Invest. Live.)

I’m not telling people to do what I do. You do you. But I’ve heard so much worry about the world that I decided to share this one simple (and risky) strategy that I follow. Life is complicated enough. Your way to simplify things may be no-load mutual funds, managed funds, commodities, crypto-currencies, bags of gold buried in the backyard, whatever. No strategy avoids every risk. Risk gets balanced by potential rewards, potentially. No strategy guarantees success. Find what works for you financially, but also practically and emotionally.

I titled my book Dream. Invest. Live. because all three matter. Dreaming inspires motivations and goals. Investing is one way to do more than dream. To Live is the ultimate goal, and one that shouldn’t be forgotten by only dreaming or only investing. Why make it complicated? Keep it simple. Good luck. That’s one simple thing we could all use.