I’ve been thinking long and hard about this idea lately, and I REALLY think there’s something to it. And I’m pretty sure I’ve heard a famous investor, or financial guru, or somebody well-respected once say it’s a great theory to adhere to also. I mean, it makes sense, right? Investing in companies you already support as a consumer? Like, say, Coke or Starbucks or any of those other awesome places like TJ Maxx? I’m already giving them all my money anyways, might as well get a return on them too! Haha…
I know some of you are already doing this – don’t be shy;) I’m totally tempted to try it out myself with this year’s SEP IRA investments. I think I’ll have around $23,000 to invest (to avoid paying more 2011 taxes!), and I’d LOVE it if all the stocks I threw in there where simply companies I rave about all the time. Especially since the bulk of my investments are already in smarter and more boring funds anyways, haha… so it wouldn’t be TOO much of a risk to try, right? ;) Keeping most your stuff safe and sound, and playing more loosely with a separate smaller account? I don’t know if it would perform better or worse in the long run, but I could certainly justify finding out.
While this route is definitely more emotional than it is rational, and good companies DO die out all the time or get slammed when they do something stupid (*ahem* Netflix), I think there’s something to be said about putting your money where you’re already actually putting it. Be proud of the stocks you own, ya know?
Here – let’s make a list of a whole bunch of brands that I love and see if they’re even investable (word?). If they are, I’ll add ’em to my consideration list for when it’s time to place the bets. Errrr… investments.
- USAA — NO :( Though, it’s probably best cuz if it were I’m sure we woudn’t get as many awesome benefits as we do now. But still sucks I can’t invest in it like I would.
- Diet Coke — Yup! Well, with its parent company: Coca-Cola. Symbol: KO – And I actually already own some of these thanks to Warren Buffett inspiring me to do so years ago ;)
- Target — Yup! And I’m pretty sure I visited them at *least* 4 times last week… you’ll know why, in a bit. Symbol: TGT
- TJ Maxx — YES!! Again, with its parent company (who also own rock stars like Marshalls and HomeGoods) Stock ticker: TJX
- Go Daddy — Nope. Though I can make money off their affiliate program when I pimp them out ;) I have no shame in getting paid if others happen to use them because of me – I love their products!
- Starbucks — Yup! Symbol: SBUX
- Google — Of course ;) Symbol: GOOG – though WOW is it expensive at over $580!
- Twitter — Nope. Though not really sure how they’re making money anyways…
- Panera Bread — Bingo! Symbol: PNRA
- Amazon — You know it! But do you have $180 to spare? Symbol: AMZN
I could go on and on, but I think you get the point. It’s very easy to invest in places you believe in and/or use a lot. And chances are if YOU love ’em so much, so do thousands and millions of others – regardless of the company’s management or financial balance sheets (though very VERY important, of course – remember what happened to Borders? *tear*). So there’s def. some huge risks involved going this route than sticking w/ those companies with solid business experience over dozens and dozens of years. Though, in many cases, some of the companies you like ALSO fall under these investments people trust a lot too! Those biggies like Coke and Apple and AT&T even – they’re always staple stocks in many people’s portfolios. So perhaps the middle ground here is finding these companies that you adore AND have awesome track records, over some of the newer or less-proven ones yet?
I dunno… but either way we’re gonna find out soon ;) I’m hoping to get some more thought on this from you all though first, to see if anyone’s tested a lot of this out already. If you have, will you do me a favor and share your experiences with us so far? Did you do better than the average market with this strategy? I’d love to see how it compares with the other kinds of investing out there – and even more so *what* the companies or brands you believe in are too;) I’m voyeuristic like that!
I’ll let you know once the trades are in progress, and what I end up picking up. It’s exciting to think about, that’s for sure! I love the idea of loving all my stocks, and not just getting them because they’re solid investments… who knows how many companies I own parts of that do something dirty or immoral or just totally something I have no idea about, ya know? I mean, that sounds bad to say – that I don’t *know* all my companies or funds I invest in – but that’s why I use advisers like my friends at USAA, or I copy masters like Warren Buffett ;) I may not know what the hell I’m doing, but you better believe they do! Haha… and in this given point of my life, I’m okay with that. I trust them to do a better job than myself who (obviously) goes on emotion with this type of stuff. It may not work for everyone, but so far I really can’t complain w/ my results ;)
So yeah – stay tuned! I should be poking my hands into my favorite companies soon enough… another fun experiment to try!
PS: Legal tells me to say this: Just like all my theories or trial runs, I don’t advise others doing the same unless they know what they’re getting into. I like to take risks and have more fun w/ my stuff than the average person, so please don’t take all this as advice! It’s just me talking out loud and putting other perspectives out there :)
PPS: Speaking of all my trial runs, remember the Ultimate IRA Test? So far the non-actively traded account is still in the lead!
(Photo by lydiashiningbrightly)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!