One of the biggest rewards of long term investing is the opportunity for you to support the stocks you purchase. Unlike day trading you are holding on to a piece of a company that most of the time you can personally support. Here are a few tips on supporting your portfolio. The first step in investing to your lifestyle is to make a list of possible stocks according to the products you use. Behind many of the products we use every day, there is a company that may be a great long-term investment, so start with a list of potential companies to look in to. Here are some idea's to get you started. What kind of soft drinks does your family drink? What brand of clothes do you wear, and where do you buy them? What type of car do you drive? Who made your TV? VCR? Computer? DVD Player? Cell phone? Where do you buy groceries, and what brands do you buy every time you shop? What about entertainment? Where do you rent movies, or go out to see new releases? Which movie studio has put our some of your favorites? What's your favorite restaurant? Fast food chain? Get the idea? Keep going until you have filled at least one page. Just run through a typical day from toothpaste to motor oil, you'll probably have at least a hundred different companies that you buy products from. The second step is to find out which companies are publicly traded, and have the stocks have done for the last 5, 10, and 20 years. Use a professional to help with choosing the best investment choices. Once you invest in a company, you need to keep up your support. That's the easy part. If you invest in Coke, why would you drink Pepsi? If you invest in Chevy, which dealership will you go to for your next car? If you invest in a restaurant chain, where would you suggest your friends go to dinner? What other product does that company make, and do they own other businesses. Even though you don't own the company outright, it still like paying yourself every time you buy something from a company that you also invest in. Here's the basic summary.
Step 1: Figure out what you already use.
Step 2: Check which companies are possible investments.
Step 3: After investing, support your future by using and recommending that company. That's it in a nutshell. It may seem like common sense to most, but I always prefer getting more involved rather then just passively investing in companies I've never heard of before getting a 'hot tip'. |
