Photo: Rawpixel. Source: Pixabay
That’s what fashion designer and business woman Coco Chanel said about the clothing business. She grew up in an impoverished family in a south of France in the late 19th century. Her mother died of tuberculosis when she was 12, and her father placed her in an orphanage, where she learned to sew. After a brief stint as a cabaret performer, she began to design and sell innovative outfits and looks. She’s credited for liberating women from the corseted style in the early 20th century, championing a casual, athletic look. Today’s “athleisure” style is, in many ways, descended from Chanel.
She insisted that clothes need to comfortable as well as beautiful and stylish. “Luxury must be comfortable,” she quipped. “Or else it is not luxury.” She combined her fashion sense with celebrity culture and a keen business understanding. Many of her insights are applicable to the investment business. Our portfolios need to be “comfortable,” just like our clothes. We need to have investments we can live with, that work with our temperament, our needs and expectations, our personalities and concerns. Our investments should be for us, not designed for someone else’s convenience – like an advisor, or a fund company, or Wall Street.
One of her most famous creations was the “little black dress,” a cocktail dress cut simply and short. Chanel wanted to create a long-lasting, versatile, affordable evening dress in a neutral color. Black had been associated with melancholy and mourning, but Chanel’s simplicity and style made it immediately appealing. Vogue magazine called it “Chanel’s Ford,” meaning it was simple, accessible, and a in neutral color that could be dressed up or down as needed.
Photo: MNA van de Bogaart. Source: Wikimedia
Fashions come and go, in finance as well in clothing. But some truths remain: investments always depend on their underlying enterprises, whether stocks or bonds or property. If an underlying business isn’t sound, a sophisticated investment structure won’t dress that up. Financial diversification reduces risk, just as a diverse wardrobe gives us options for different occasions.
Above all, Chanel encouraged folks to take responsibility for their appearance, to “have the age they deserve.” The same thing is true with our money.
Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”