Investments advisor tops 50 years
When it comes to the personal investments advisory business, Don Kosten has practically seen it all. After more than 50 years in the industry, he will be officially retired from Edward Jones as of Dec. 31.
Kosten, 78, was personally recruited by the company's founder, Edward D. Jones Sr., in November 1969, at which point he had already been in the investments industry for more than 10 years. Kosten opened the first Edward Jones office in Michigan, in the Waters Building in downtown Grand Rapids. Prior to Edward Jones, Kosten had been with a Chicago-based investment company since 1957, working out of an office in the Waters Building. Kosten, who holds a business degree from the University of Alabama, had previously worked in industrial sales for Sherwin-Williams paints.
"He's had an office in the Waters Building for 50 years," noted Dan Miller, an Edward Jones principal and general partner and regional leader of the company's advisors in West Michigan.
Edward Jones, with headquarters in St. Louis, Mo., had about 65 offices in several states when Kosten started the Grand Rapids office. Today, Edward Jones has more than 11,000 offices and more than 10,000 financial advisors.
Last week, the owners of the Waters Building and the Edward Jones company joined forces to celebrate Kosten's long career. Flying in for the day was John W. Bachmann, who served as managing partner of Edward Jones for 24 years, beginning in 1980. During that time, the company expanded into a total of 28 states, plus affiliated offices in Canada and the United Kingdom. Kosten was a member of the Edward Jones “kitchen cabinet” which served as an advisory panel to the managing partner.
Kosten suffered a stroke in 2005, but that didn't stop him.
"I wasn't out of commission very long," he said. "In fact, I was doing business while still in the hospital."
With his perspective from 50 years of experience directly related to the economy, Kosten has seen a number of recessions and a few investment bubbles. He said the current recession is "a little more difficult than some of the previous ones" in regard to its longer duration and the impact on industry, especially in Michigan.
Kosten said he firmly believes the economy will recover. Since 1900, he said, "the market has gone down 31 times, and it came back 31 times. And each time it came back, it came back stronger. So there's good history on our side."
What was he telling panicked investors a year ago, when stocks plummeted?
"Just to hang in there," he said. "We usually told people, ‘We've seen this before. Hang in there; it will come out in the wash.’"
"Long-term investing pays off, not short term. People usually buy things when they feel good, and they sell things when they don't feel good. It should be the opposite," said Kosten.
A long-accepted tenet of American investing was that buying a home to live in was the first step in building a retirement portfolio. Should the purchase of a home still be a key part of an individual's investment strategy?
"The way people have been losing homes, you wonder about that," said Kosten.
He agrees that virtually none of the homebuyers prior to the recession anticipated the drop in home values, nor did executives in the financial industry. Some of those executives "just didn't watch the store as closely as they should have," he said.
His basic advice to people who want to invest for the future is: "Get somebody you have some faith in and let them guide you, because they can help you a lot."
Over the years, "I've created a few millionaires myself," added Kosten.
As far as which companies to invest in: "We say stay with major companies that are well managed."
Enron was an example of a new company that really took off — then took a lot of investors down with it. "People got a little greedy in that situation and they thought there was no end to this thing. And they found out that that was not true."
About 10 years ago, the big investment bubble was in Internet start-up stocks. Most recently, it was new, upscale homes. The Business Journal asked Kosten what the next big fad in investing will be.
"Who knows? That's a good 64 dollar question," he said. "We just say, ‘Stay with good companies.’" And when the stock dips, "That's a good time to buy."