Are you put off investing in mainstream companies?

Fsp Invest, 16 Oct. 2013

Tags: investing, mainstream companies, profitable, dividends, companies, investing strategy

When it comes to investing, you might not be too keen to invest in 'mainstream' shares. After all everybody has probably heard of them. And that probably means that there is no money left for you to make buying them. Well you could be wrong, especially if you're interested in dividends. Read on to find out the advantages to investing in mainstream companies...

If you're looking for some companies to add to your portfolio for their dividend paying ability, you can't go past mainstream shares, Dan Ferris in S&A Digest explains...

You might find that everyone has heard of these companies so you might think there's no advantage to investing in there.

But for this to be true, human beings would need to have perfect behaviour in the stock market, always buying at the bottom and selling at the top.

But of course, if they had perfect behaviour, there wouldn't be any tops or bottoms in the first place. That's true for the entire market, and it's true for every stock in it.

Market analysts covering anything closely doesn't mean much. The idea that you're going to find some little-known stock that's not well-covered is romantic, but it's rare.

It's not Olympic figure skating or gymnastics. There are no points for novelty in the market. You either make money or you lose it.

And most people will lose it because they believe in novel stories about exciting little companies, instead of just trying to figure out how to make money.

Stable and boring companies can prove very profitable

It's really easy to get an advantage over other investors by just buying large, stable companies who increase their dividend payments over time. You want to buy at a good price, reinvest your dividends, and not sell in a panic every time the market falls 10% or 20%.

Human nature will never change, and that will always create opportunities to buy wonderful businesses at cheap prices. They might not come around often, but they definitely come around.

So there you have it, the advantages to investing in mainstream companies.

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