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www.insidehalton.com |OAKVILLE BEAVER |Thursday, July 6, 2017 |24 Foodforthought... Am azon andW hole Foods an investm ent lesson O n June 16, Amazon.com Inc. an nounced its intended purchase of Whole Foods Market Inc. for $13.7 bil lion (US), and the reaction was swift. Many in the grocery channel predicted doom and gloom and a total disruption within the North American retail food market. I see an in vestment lesson. One that could be helpful in managing your investment portfolio. Food distribution is a mature business. Com petition is f erce and margins are low. It' s really hard to make a good prof t selling food. Currently, the majority of grocery sales occur in bricks-and-mortar retail outlets. E-commerce accounts for just fv e per cent of North Ameri can sales in the grocery market. Interestingly, Canadians aren' t adopting ecommerce as quickly as Americans. According to the Retail Council of Canada, our online shopping represents only 1.99 per cent of fast-moving consumer goods sales. The majority of the 460 Whole Foods Market stores are in North America, includ ing 13 in Canada. Its upscale Peter brand considers Watson `quality the highest Guest Contributor form of value' for its customers. The magic of this takeover will be the ability of Amazon to capitalize on the high-quality brand image of Whole Foods while using its expertise in cost cutting and effcient distribution. Opening up low-cost distribution centres will give Amazon a competitive advantage over the expensive real estate of most food retail outlets. Delivery is what it does best, and in some Dollars & Sense markets, delivery can be done within one hour of the order being placed. That is a game changer, which leads us to the investment lesson. Never feel confident any single investment you own is safe. By sin gle investment, I mean owning a specifc stock. The world is spinning quickly these days and the laws of business competition can be as tena cious and unpredictable as the laws of nature. Strong winds are blowing in all aspects of com merce and owning specifc individual stocks can be unpredictable and risky. The lesson is to understand and respect the beauty of diversifcation. Spread your money around to many different companies, in many different industries, in many different countries. Own the market, versus just a few of your fa vourite stock picks. You don' t know the future therefore you are encouraged to diversify to protect yourself from investments that suddenly fall out of favour. The day the Whole Foods takeover was an nounced, many large and respected food distri bution companies, from Loblaw' s and Sobeys to Costco, had their stocks react negatively with a sudden decline in value. In this column, I have often referred to the tragic fall from grace of Nortel and how investors with concentrated positions in that stock lost sign if cantly The historic landscape is full of these examples. A friend recently reminded me that Block buster was once an empire that dotted the North American landscape. We would happily hop in our cars and drive to a retail location to choose a movie to watch at home. Blockbuster was a revolution against watching conventional TV Then a little upstart called Netflix came along and at the push of a button we had more movie selections than we could seemingly watch in a lifetime. Blockbuster had an opportunity to buy Netflix, but decided to compete with them instead. Blockbuster went bankrupt. There will be other Nortel' s and Blockbusters. Protect yourself against the cruel and harsh reality of business and accept that excellent com panies can suddenly disappear. Diversify your portfolio. -- submitted by Peter Watson. Peter Watson is an agent of, and securities products provided by, Aligned Capital Partners Inc. (ACPI). ACPI is a member of the Investment Regulatory Organization of Canada and the Canadian Investor Protection Fund. The opinions expressed are those of the author and not necessarily those of ACPI. Peter Watson provides wealth management services through Peter Watson Investments. The Latest In Hearing Technology W o r ld 's S m a l l e s t H e a r i n g A id The M O X I N ow SPECIAL: It's a c t u a lly th is sm a ll! 50%OFF P e r P a ir LA KESH O RE HEARING P Q Pa r a m e d ic a l SERVI CES Established Since 1979 RESULTS Che m A HD 1·yrrfj )ut Oi O r cw s On Goog le r nd Hon I r-r*l r* 1*s> E-mail: lphs113@cogeco.net · Website: lakeshoreparamedical.com 1 1 3 J O N E S S T R E E T , O A K V IL L E , O N · 9 0 5 - 8 2 7 - 2 9 0 2 ON NOW AT T H E B R IC K ! H o m e Stars ^ B R IC K p r e s id e n t s STORE HOURS MAYVARYBY LOCATION See thebrick.com for details. SA LE WODMSONW / i t , ^tOtiets o u tle t _ _ S A V IN G Y O U M O R E For more details go instore or online © thebrick.com .