Companies, Not Stocks
You may have heard me in conversations and review meetings refer to ownership in “companies”, where you expected me to say “stocks” for that portion of your portfolio intended for long-term growth. I’ve found over the years this is an important distinction. You are not an investor in the stock market as much as you are an investor in the world’s greatest companies. As you remember, earlier this year, stock prices fell around 20% from the start of the year. But did the true value of these companies fall by that much as well? Value is not what’s reflected in the everyday, constant change in the price of the stock. The value of the companies that you own is represented by the relentless innovation in products and services that the world consumes daily. Participate in this experiment with me. List 10 companies whose products and services you or your family use nearly every day. Below is the list that my family came up with:
• Apple – This is the phone of choice in my family, not to mention the iPad and AirPods, too.
• Alphabet – We Google something every day and watch plenty of YouTube.
• AT&T – At the moment, our cell phone carrier, though Verizon held the spot for many years.
• Ahold Delhaize – What? This worldwide food retailer owns Food Lion, which I often drop in on the way home for that forgotten ingredient.
• Proctor and Gamble – We use a litany of their products from batteries to razors to cleaning supplies.
• Amazon – Much to my chagrin, something is often being ordered from this mammoth retailer
• Wal-Mart – Between the flagship store, bulk retailer, Sam’s Club, and our tv brand, Vizio, this storied retailer is often used by our family.
• Honda – I love my trusty Accord, but Ford and Toyota (Lexus) have a presence in our driveway too.
• Capital One – Our credit card of choice for many years.
• Microsoft – I’m writing this using Word, and the company has many services we use regularly.
Now, would you stop using any of these products and services if the stock market fell 50%? No, and neither would just about anyone else. Stock prices regularly fall, but as long as regular people like you and me continue to buy products and services of these great companies, their value will endure. If history is any guide, their earnings and dividends will eventually resume their gradual increase and provide a good, compounded return over time. “Companies, not stocks!”
The foregoing is not a recommendation to buy or sell any individual security or any combination of securities. Any opinions are those of Landon Vick and not necessarily those of RJFS or Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete; it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decisions.
