Just Call Me Warren Buffett…

Everyone has been asking about my investment strategies (okay, in reality no one has been asking). Because of all the clamoring, I figured I would create a post on the subject, focused on my own personal investment strategies. Want to know how I’ve done? Read on to find out.

But first, very important:

1. Know your time-horizon. And by know your time horizon, I mean, we aren’t day trading here. If you want a guaranteed return in the next month please stop reading. And please don’t ever claim to invest.
2. If you are a ‘newbie,’ but would still like to invest, I’ll make this easy for you. Put your money in the S&P500. Done. Stop reading. Timing the market is impossible, so for best results, put some money into the S&P in regular intervals. I like to buy every two weeks, regardless of where the market is. It all evens out in the end, and in buying the S&P500 you are buying a piece of the 500 largest US publically-traded companies. You’ll performance will mirror the S&P’s, which has historically provided a great return over time.
3. However, if you want to buy individual stocks, be sure to know the companies you are investing in. I don’t necessarily mean know their balance sheets or their management, but know their products. Coca Cola? Yup, I know that one. The new-fangled investment idea that is too good to be true that everyone is buying? See number 1. I’m in things for the long haul so while I may miss the boat on some of these can’t-miss tips (there’s a little bit of sarcasm there), I know that:
   • I use Proctor & Gamble products in pretty much every room in my house;
   • I love (and need) coffee every day so why not invest in my morning ‘me-time?’
   • I have to eat, so why not invest in the consumables I love (and consistently eat)?
   • Not only do I have to eat, I have to wear clothes every day too. Ha! So I buy the companies of my tried-and-true clothing brands;
   • Etc.
4. Believe in the products of your company and be willing to support it. There is a reason that I bought Smuckers. Not only is it an amazing family-owned company (and I love family-owned companies…but that is another post), but guess what – to me, their natural peanut butter is the best. Some would argue with me, and that’s fine. Remember, this is only my opinion here. But based off of that yes, I bought SJM. And therefore I will buy that product – even if it costs more than some other peanut butters. Swoon.
5. Don’t evaluate your portfolio on a daily basis, do it quarterly (if you must), but I prefer bi-annually. Because again, refer to number 1. Know your time horizon.
6. Understand how the market in general is performing. I like to benchmark against the S&P500. Sometimes things are benchmarked against the Dow, but given the Dow tracks the performance of only 30 stocks, I generally benchmark against the S&P. But knowing this, don’t get annoyed at your portfolio for being down 1% over the past year….especially if the market is down 5% (in that case you have outperformed – congratulations!). Also, understand the opposite. It’s easy to get excited at a 5% or 8% gain in your portfolio, but what if the S&P is up 22%? Then you may be missing out.
7. I love dividend-paying stocks. Especially dividend-paying stocks on iconic brands. The stocks may not move with volatility (up or down), and their yearly return might not be as good as an up-and-coming brand, but if you don’t know what to do with your cash, think along these lines. Coca Cola (previously mentioned, and no I am not getting any kickbacks for this…no one reads this blog, remember?) pays over a 3% dividend. That, coupled with its historical performance of a couple percent a year gives you a safe return of 5+% a year. If you want to be safe with your money, then think along those lines. What savings account gives you that sort of return? Or CD? I will save you the research time. None. And you still have easy access to your money (unlike a CD, for example, which may need to go to maturity).

So how have I done? Well, it depends on the account. My 401k only buys the S&P, so it mirrors the S&P performance. I am fully invested, so my total return over the past 5 years in my 401k has been approximately the following:

So $1,000 invested in 2014? $1,503.28 at the end of 2018. Or almost 9% a year. Not bad. Not enough relative to what people are wanting these days. But money compounds, and it’s a beautiful thing. So I’ll wait on that 9%. Because guess what? $1,000 compounded at 9% a year for 30 years? That’s over $13,000. All just by sitting in the S&P!

But I digress…

So what about my accounts outside of my 401k? Here are a few of my favorite stocks, and my rationale behind owning them (whether that rationale makes sense to anyone else other than me though, is another post, haha). In no particular order….well actually, in alphabetical order:

• ABEV – Ambev. International exposure…in the beer market primarily. Based in Brazil.
• BKS – Barnes and Noble. Random investment, but once Toys R Us went under, I thought that people might head to their local BKS for similar gifts. And I love spending time in a nice Barnes & Noble.
• BUD – Budweiser. Market share, market share, market share. Budweiser sells one out of every two beers in the world. 
• CAT – Caterpillar. Heavy machinery? Roads will always need to be maintained…
• DE – John Deere. A farm-girl at heart, John Deere, you have my heart. Some of the best farming equipment you can buy, and let’s not forget how much farming this country still does.
• DEO – Diageo. Covered the beer, how about the ‘spirits?’ Tanqueray, Captain Morgan, Don Julio, Smirnoff, Ketel One, Ciroc, Johnnie Walker, Crown Royal, Oban, Bailey’s, Guinness. AMONG OTHERS. Best in breed.
• DIS – Disney. ‘nuff said.
• FMX – Fomento. Who doesn’t like a good old 7-Eleven? This is like a 7-Eleven in Mexico. Additional international exposure.
• HSY – Hershey’s. ‘nuff said.
• KO – Coke. ‘nuff said.
• MCD – McDonald’s. I think ‘nuff said. But just in case it isn’t, think about this – what a global brand. You can go to McDonald’s anywhere in the world and know exactly what you are going to get. They have evolved with the times, their product is great, and what a footprint they have!
• MDLZ – Mondalez. I just love their products. Triscuits, Wheat Thins, Oreos, to name a few.
• MSFT – Microsoft. I think Bill Gates is a stand-up guy.
• PEP – Pepsi. ‘nuff said. This is a play on junk food actually. While I am in Coke more for the beverage-side of things, I am in Pepsi for the snacks-side of things.
• PG – Proctor & Gamble. Pantene. Tide. Herbal Essence. Always. Gillette. Vicks. Swiffer. Crest. Mr. Clean. Downy. Pampers. Gain. Febreze. Secret. Charmin. Puffs. Cascade. AMONG OTHERS! Best in breed in pretty much everything.
• SJM – Smuckers. See comments above on their peanut butter. But I also love how they have diversified with things like Folgers, and Milkbone.
• UL – Unilever. Simply stated, I bought this because of the Dove campaign for women. And believing in a company? It has paid off in this instance. 
• TIF – Tiffany’s. Little blue box. Need I say more?
• WM – Waste Management. Someone needs to pick up the garbage. And this company is really well run.
• WWE – Wrestling. One of our first stocks. Talk about believing in a company. Vince McMahon is iconic. Taking pay-per-views over the top and really thinking outside the box. Love the company, love the product, love the family.

Let me know what you think about this. Again, these are my opinions alone. Am I a stock investor? No. I am a regular person, not educated in finance. But smart enough to realize that the stock market is a great opportunity to build wealth. Happy investing!