Check Your Bills: Beat the Market by Investing in Companies You Use
“Stop! Check your feet!” I shouted up to Mike.
The rope pulled tight and he swung off the wall.
I was trying to teach my good friend how to rock climb.
New climbers often think that climbing is about pulling themselves up the wall. They keep their eyes fixed up, looking for the next crevice to grip onto.
But climbing is mostly about pushing up. With a solid foothold, it’s easier to push up with your legs than to pull up with your arms.
But newcomers forget their feet. They don’t look down to find the best footholds. And once their hands fatigue, they slip off the wall and hang off it in frustration.
New investors often share a similar fate to new climbers. They look ahead for the next big opportunity. This could be marijuana stocks, the Internet of Things or artificial intelligence.
While all hold the potential for huge gains, investors forget to build a solid base. They forget their feet: the businesses they use day in and day out. These core businesses can be cash flow machines.
Look no further than your monthly bills for some of the best investments on Wall Street. Not only do they give you a solid base, but they have more than doubled the S&P 500’s return.
IPOs Aren’t the Only Route to Riches: Invest in Companies You Use
“Only two things are certain in life: death and taxes.”
It’s an old adage my grandfather repeats at nearly every family gathering. But I’d like to expand that list to include insurance, energy bills, water, disposal fees, internet and phone bills.
Few things in life are as reliable and consistent as bills for any of these services. And nearly every one of them is an investment opportunity.
I like to own the same companies I cut a check to every month. After all, dividends feel like a rebate, and share price growth softens the blow of rate increases. You can profit a bit from everyone else having to pay more too.
Let’s see what a basket of these companies might look like:
- Insurance: The Progressive Corp. (NYSE: PGR).
- Power: NextEra Energy Inc. (NYSE: NEE).
- Disposal: Waste Management Inc. (NYSE: WM).
- Internet: Comcast Corp. (Nasdaq: CMCSA).
- Phone Lines: AT&T Inc. (NYSE: T).
In a five-year period, an equal-weighted portfolio of these companies returned 140.3%! That’s more than double what the broader S&P 500 Index returned.
These aren’t hard-to-find companies either. After all, you cut a check to a name just like one of these every month. Your list will likely look a bit different.
But many are considered blue-chip companies. They have a strong track record for stable growth.
In the Real Wealth Strategist newsletter, we recommend natural resource companies that feed that stable growth. Many are the same energy producers that pump the oil that ends up in your car. Or the natural gas that powers your home.
These aren’t flashy companies, but with strong dividends, they can help offset higher energy prices. That’s how they give you the solid foothold you need.
Internal Analyst, Banyan Hill Publishing
P.S. Watch the video below to catch my latest marijuana market update. Unlike the companies listed above, the marijuana market is a fast-paced and riskier sector. Stay up to speed on all of the latest breaking news by subscribing to my YouTube channel.