Peace of Mind Investing

A common trait among us humans is that we spend our money on things that we need followed by things that we want. That is why when you think about it, you should always invest in companies that provide you with what you need first because they are the ones that tend to be the more profitable enterprises. If you invest in companies that offer products or services that you either can’t afford or can do without, they may not turn out to be as successful in the long run.

Think of it this way. If you invest in a portfolio of publically traded essential product and service companies in Canada that you rely on for most things in your life, your portfolio would consist of at least one of the following businesses:

Food
Utility
Telecom/Media
Transportation
Energy
Bank
Healthcare

It would also include companies that provide critical support services and products to these businesses in the following sectors:

Technology
Industrial
Materials

Taking this concept one step further, imagine owning a portfolio comprised of the 10 largest businesses in Canada measured by sales, profitability and a track record of recurring dividends. Would you worry about the share value going down every once and a while if you plan on holding on to this portfolio for at least three to five years?

Peace of mind comes from having enough cash flow and liquidity to look after what you need today and what you will need in the future. It starts with knowing where your money is going so you can re-direct some of it into savings and investments to provide an income stream when you retire or the cash you will need for other things in your life.

This brings us back to the blog I wrote in January about the 5-B’s: Big, Basic, Boring, Brand-named Businesses that consistently reward investors who hold them with healthy growing dividends and reliable share price increases over time.

So start your 5-B portfolio by simply putting the business name next to each of the categories that you are spending your money on today. Want help with this? Call us, and we can show you how responsible and common sense investing can bring you comfort and peace of mind.

David J. Angas, CEA

Senior Vice President, Financial Advisor

Family Wealth Counsel Advisor Group/Raymond James Ltd.

The views are those of the author, David Angas, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. Raymond James Ltd. is a Member - Canadian Investor Protection Fund.