A Good Rule to Follow
In this article, I want to expand on some advice that I have heard which is to invest in companies that are going to change the world. Now off the bat, this seems to be very obvious and trivial advice. However, as I expand on this topic I want to dive deeper into why these companies are the most profitable in the long run as well as how to try and identify companies that fall into this category.
Why This Advice Works
The advice to invest in companies that are going to change the world works because people are drawn to new ideas and new innovations. It is obviously possible to create a new oil company or a new electric car company and be successful. However, companies that were trailblazers in their specific fields hold an advantage whether it be due to resources, better technology, or even a following of people who respect their work.
In addition to simply being successful, these companies are more sustainable in the long run. Take Microsoft, Apple, or Google for example. Even though the stock prices of these companies are rather high (Microsoft - $208, Apple - $388, & Google - $1520 & ), they are involved in so many areas of the tech field that they are, in my opinion, going to provide great returns for the many years to come. Also, relating back to the advice, they change people's lives. A large number of people rely on their iPhone, Amazon Prime shipping, and Microsoft Word for example to function in their daily lives.
Companies such as Microsoft, Apple, Google, and so many more continue to change how people live their lives, making their value grow by the second. However, you may be wondering how to find the next "world-changing" company and that is a good question.
Is This Company Life-Changing?
Being able to recognize if a company is going to change the world may be one of the hardest things to do when considering buying a stock. There are many factors such as competitors, resources, and if the idea is sustainable. My advice on the issue is to take a moment and consider the question. Is the company and the product they offer going to be accepted and needed by society? Would people rather sit on their couch to watch a movie than go to a movie theater (Netflix)? Yeah probably. Will people pay a yearly subscription of $99 to get almost anything delivered to them for free in the next two days (Amazon)? Yes definitely. These are things to consider when trying to find the next "big" stock or considering buying a powerhouse that is already taking over the market.
My Consensus
My final consensus is that investing in "world-changing" stocks is a difficult thing to do, maybe. We already know that companies like Apple and Microsoft have changed the world so is it too late to invest in them? Not at all. Although we never know what is going to happen, in my opinion, the long term returns of these "world-changing" stocks will continue to be massive in years to come!
July 14, 2020
Tags :
stock
,
stock market
Subscribe by Email
Follow Updates Articles from This Blog via Email
No Comments