Merrill Lynch’s recent report stating the possibility of a GM bankruptcy is another reason to ask the following question:
What company will still exist in 50 years? How about 25?
The trouble with buy and hold philosophies for long term investments is that there really aren’t any companies that will surely be around in 50 years. We have seen many giants of the industrial revolution and beyond crumble in recent years. It seems that no industry is safe. The automakers are in trouble. The airlines are in trouble. Banks and Financial Companies, Energy Companies, Telecom companies, and many more…no industry is immune.
It’s easy to think that the current seemingly indestructibles like Google will be here forever, but they are still too young to make such a conclusion. As old economy stocks are crumbling and new economy stocks lack the history, where can we look for long term investments?
This question is of great importance because many people’s retirement is still 25+ years away. The holdings in those accounts today may very well be for non-existent companies come retirement time. As a result, regularly monitoring and adjusting your positions may be the only way to avoid having portions of your retirement portfolio become as worthless as the companies they represent. Constant fiddling will likely hurt returns, but reviewing your retirement accounts every few months, or yearly at least, seems to be more than prudent.
Can you think of any companies that will be around for the long term?
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