Chances are good that your electric utility, cable provider and mortgage lender did not get a Christmas card from you last month.
After all, each one collects your hard-earned money throughout the year, all while threatening to increase rates and offering nearly nonexistent customer service.
Rather than resign yourself to simply sending money to companies you don’t particularly like, turn the tables and let your least-favorite corporations make you some cash.
While we might not like these businesses, the internet and cable companies are not going anywhere any time soon. The same goes for electricity, gas-fueled cars and personal banking.
If you decide you want to get in on these companies’ profits, you need to be smart about it. Here are three tips to help you out:
1. Do your research
Don’t buy a stock because someone said it had a great five-year return. Don’t buy a stock because you got a hot tip from a co-worker.
Instead, do your own research. Check out the quotes for stocks that interest you. Consider their historical performance, and then do an online search about the company to see if there is any sign of troubled waters. For example, is the company being sued or was its latest product release a bust?
Even better, skip buying stock shares of individual companies and go the mutual fund route.
Money Talks News founder Stacy Johnson generally advises against individual stock purchases. Instead, he tends to recommend a subtype of mutual funds known as index funds. For more on that, check out “Ask Stacy — How Do I Invest in a Mutual Fund?”
2. Decide the best way to buy
Now, decide how to buy into your hated company of choice.
If you have a lot of money to invest, you might want to connect with an investment professional. If you’re planning to start small, read “How to Get Started Investing When You Don’t Have Much Money.”
If you’re determined to buy individual stocks, a number of online brokerages make it easy to buy and sell stock.
3. Stick it out for the long term
When you buy and sell stocks, you almost always pay a fee. The online brokerage company might charge only $4.95 or $9.95, but that can add up quickly and cut into your gains.
More importantly, the value of stocks goes up and down on a daily — and even hourly — basis. Trying to time the market is a surefire way to lose your sanity, as well as potentially your money.
Make your picks and then resist the urge to move your money around unless you think the company is starting a long nosedive or is on its way to going under.
If buying and holding on to a stock for the long run makes you nervous, you may have too much money in one particular stock. You may want to spread out your money across multiple stocks or, better yet, mutual funds. Diversifying is the best way to reduce your risk of a catastrophic loss.
What are your thoughts on investing in companies you hate? Share with us in comments below or on our Facebook page.