Can’t Beat ‘Em? Join ‘Em: Buy the Companies You Hate

Does your cable company make your blood boil? Turn the tables, and let the company make you some money for a change.

The electric company, your cable provider and your mortgage lender: All are collecting your hard-earned money month after month. And they may be making your life miserable, too, between increasing rates and 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 firms make you some cash.

Make money with smart stock decisions

Just because a company is making money off your back doesn’t mean you can’t also make money off it. As Money Talks News founder Stacy Johnson points out, his stock in Texas-based energy multinational Phillips 66 has increased 360 percent since his purchase in May 2012. And that’s only one of a number of major stocks he owns that have seen their value double, or even triple, since he purchased them. (Check out Stacy’s portfolio here.)

Interestingly, even the companies we seem to universally hate keep on making money. Check out the five-year gains on pay TV and internet providers, which all seem to consistently rank near the bottom of the American Customer Satisfaction Index.

  • Dish Network — 113 percent
  • Time Warner Cable — 154 percent
  • Comcast — 177 percent

(Always keep in mind, past performance is no guarantee of future gains.)

The fact is we may not like these companies, but the internet and cable are not going anywhere any time soon. Same goes for electricity, gas-fueled cars and personal banking. Sure, even a big company can go under, but businesses operating in fields such as these are likely to keep making money because they provide services and products needed by the vast majority of the population.

3 tips to buying stocks the right way

Once you’ve decided 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 I said it had a great three-year return. Don’t buy a stock because Stacy Johnson has it in his portfolio. Don’t buy a stock because you got a hot tip from a co-worker.

Instead, do your own research. Check out the quotes from 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 individual stocks and go the mutual fund route. Even Stacy doesn’t advise individual stock purchases, and you can find tips for picking a mutual fund in this article.

2. Decide the best way to buy. Now, you need to decide how to buy. If you have a lot of money to invest, you probably want to connect with an investment professional. However, if you’re planning to start small, read this article on four ways to invest without much money.

If you’re determined to buy individual stocks, buying directly from the company may the cheapest way to go. Otherwise, a number of online brokerages make it easy to buy and sell stocks. NerdWallet has a review of the two biggest players to help you start comparing.

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 nose dive or is on its way to going under.

If that 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.

For further reading on the subject, check out this article on how to get into the stock market safely.

What is your approach to investing in individual stocks — or do you steer clear? Share with us in comments below or on our Facebook page.

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