There are many reasons people choose to avoid stock investments. With so many stocks to choose from finding the right ones to invest in can be overwhelming. Even knowing where to begin can be difficult. But it shouldn’t be. Finding potential stock investments abound everywhere and can come from the most unconventional sources including your own mutual funds.
Who really wants to spend hours on end pouring over pages upon pages of financial statements and stock screeners. It’s not even my idea of a good time. So, instead of thinking big we need to minimize the entire process, cut out the fat and get to the good stuff.
Invest In What You Know
I’m a big believer in the Peter Lynch philosophy of investing in what you know. So what better place to start then by looking through your monthly budget, bills, shopping bags, grocery lists, favorite products and favorite stores. You could even expand it to include things at work. The one thing you’re an expert at is the products and services you use every day.
Identify Your Go-to Products
Find those items, services, or stores you always use each month. Some people will only buy specific brands or only shop at a specific store for certain items. It could simply be something you pay for every month. Maybe it’s a particular restaurant you frequent or your favorite clothing shop. It may even be a free service like email. If you’re spending time or money on something, put it on the list.
Find The Company Behind Them
There’s a company behind every product, if you’re not sure who makes it, Google it. It may be a subsidiary, owned by a public company. You’ll probably come across some private companies. Just cross them off and hit the next one. Check the company’s website, if there’s a page for Investor Relations, About Company, or Parent Company you’re heading in the right direction. It may be as easy as looking it up on Wikipedia.
My Brief List
I took a couple minutes and listed 10 products and services I always use. Some of the products are things I always buy, services I pay for every month, and a couple are even free. But I’m a repeat buyer/user of all of them, whether I have a choice or not.
- Comed – the local electric company. If I want lights I have to pay for it. Their website tells me it’s a subsidiary of Exelon Corp. (NYSE: EXC).
- Comcast – the cable/internet provider. I’m not married to it, but I pay it monthly and would switch if something better came along. Comcast Corp. (Nasdaq: CMCSA).
- Gillette Razors - when i do shave, it’s the only brand I use. Falls under the “don’t mess with a good thing rule”. Wikipedia tells me the company merged with Proctor and Gamble (NYSE: PG).
- Google – use it daily for email, search and data tracking for this site. It’s all free but I use it constantly, even to look up info on the products and companies listed here. Google, Inc., (Nasdaq: GOOG).
- K-Cups – my must have morning coffee, sometimes afternoon coffee. I got a Starbucks a block away and have no need to go there. Green Mountain Coffee Roasters Inc., (Nasdaq: GMCR) makes the cups and the brewer.
- Peoples Energy – the local gas company and another must pay. It’s a subsidiary of Integrys Energy Group, Inc (NYSE: TEG).
- Levi’s Jeans – the only brand of jeans I wear. Unfortunately it is a privately held company so investing in it is not an option.
- Sprint – cell phone provider. Never had a major issue and don’t see a change soon, Sprint Nextel Corp. (NYSE: S).
- Tide – the only detergent I’ve ever used. Also falls under the “don’t mess with a good thing” rule. Also a Proctor and Gamble product, printed on the side of the bottle.
- Yahoo! – I’m a daily Yahoo! Finance reader along with the local and world news. Also use it to track my investments as well as my “stocks to watch” lists. And used it for all the stock quote links, Yahoo! Inc. (Nasdaq: YHOO).
This is just a small example of the potential stocks I could invest in. I certainly know the products and services well enough. And in a matter of a few minutes I went from every stock to eight stocks. Which is a much easier number to dig through. They could all be duds, but I’ll have to do some research to find that out. If none of them turn out to be an attractive investment choice, I can keep my money in the bank until I find one.