Too often, I hear from investors that they don’t trust stocks because they cannot “touch or feel it”, or that “it’s just a name on a piece of paper”. These same investors prefer to buy into real estate, which they can see, touch and brag about to friends, who can also see and touch the asset.
This is a perspective on investing that has never made sense to me…
I don’t see stocks as emotionless pieces of paper. They are an ownership stake in a company doing real business in the real world with real people and making a real impact on the economy.
To show you want I mean, allow me to describe a day in my life:
Every day, my alarm goes off at 7 am, and as I slowly wake up, I notice my bedroom is a comfortable 21 degrees Celsius, despite living in Toronto where the temperature is below zero outside for half the year. That reminds me that the natural gas I use to warm my house is owned by Gibson Energy and transported through pipelines owned by Enbridge.
My next step is to turn on the washroom lights and take a hot shower, which reminds me that the electricity used to turn on my lights and heat my water is generated by Canadian Utilities.
After my shower, I brush my teeth and notice the writing on the toothpaste tube promises that my teeth will be brighter in seven days, reminding me that the labeling was handled by a labelling company called CCL Industries.
Now ready for work, I move down to the kitchen where I make myself a smoothie. I blend a banana, a cup of strawberries and blueberries, and add a couple of scoops of yogurt for protein. As I enjoy my delicious beverage, I reflect on the fact that the fruit came from farms in California in rail containers carried by CNR before it arrived at a GTA terminal where it was transported by TFI trucks to my local Metro store. And if I spend a bit more time reflecting on those foods, I recall that the farmers growing the produce used fertilizer produced by Nutrien to help grow the perfect fruits.
I leave the house at 8 am and run to catch the #7 Bathurst Street bus, which was coincidently (or maybe not), built by a company called New Flyer Industries, a leading North American bus manufacturer.
Arriving at work, I notice the building is managed by a team from Brookfield Asset Management. I then arrive in my office, where I turn on my computer. I quickly check data from many different internal sources. If I call our IT department and ask how we access so many different sources of data at the click of a button, they will tell me that we use a product from Open Text.
Later, during lunch, I take out my cell phone and call a cycling friend to arrange our Saturday morning ride. That’s when I remember that my cell service is provided by Telus. While I have my phone out, I click on TD Bank’s client site and check the due date of my next Visa bill. It’s due today, so I make a payment using the mobile app. Heading back to my desk, I remember that my son went to the dentist last month and I wanted to check if I was reimbursed for the invoice, so I open the Great West Life (a Power Corporation company) site on my computer and notice that the payment was received on the same day as the treatment.
After work, I decide to visit a new bike store to look at carbon wheels, so I make my way home on the bus to get my car. Before I turn on the ignition, I check the glove compartment for my pink car insurance certificate and, to my surprise, I am covered by Intact Insurance.
On the way home from the cycle shop, my wife sends me a note instructing me to drop by a Dollarama store to pick up wrapping paper, paper plates, tablecloths and dish soap, all for a party she is hosting next weekend.
My last stop on the way home is to pick up a long table I am borrowing from a university friend who lives in a rented apartment in west Toronto. He never bought a house because he is a pilot and travels almost 80% of the time. We load the table into my vehicle and discuss the fact that he has been grounded for several months due to the government’s ban on the planes he specializes in flying, the Boeing 737. He explains that he is keeping his skills sharp by practicing in a flying simulator owned by CAE. As I drive away from his townhouse complex, I notice that the project is owned by InterRent REIT.
At 7 pm, I finally arrive home and start preparing a home-cooked Italian dinner, but not before I check my account balances at Royal Bank and Equitable Bank Then, after a lovely evening with my wife, I make my way upstairs around 11 pm to retire for an eight-hour rest before I do it all over again tomorrow.
Over the course of a single day, I was able to “touch” and “feel” the products of over 20 companies, all of which are currently held in the Richard Dri Dividend Growth Model. Stocks are not just emotionless pieces of paper, they are integrated into our lives. More importantly, they are companies that hire thousands of people and produce products we use every day, generating profits that produce dividends for investors like us.
What is the number 1 piece of financial advice I give any one? The piece of financial advice guaranteed to work long-term?
Invest in companies you know.
It’s a tried and true investment practice that has helped many people achieve their financial goals and live the life of their dreams.
Do you invest in the companies that produce the products you use? If not, what’s holding you back? It’s never too late to start.
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