Don’t know what stocks to invest in? This sector could be for you

Julie Brownlee, Fsp Invest, 25 Jul. 2014

Tags: insurance, what stocks to invest in, investing strategy, insurance sector, insurance companies, benefits of investing in insurance sector, long-term investing strategy



If you’re not sure which stocks to invest in, or you’re just starting your investment portfolio, where’s a good starting point?

It’s a difficult question. But there is one sector of the stock market that bodes well over the long run.

Read on to uncover what sector this is…



It’s time to look at the insurance sector


You may be surprised, but insurance companies perform well over the long-term. You may not relish paying them for your home and car insurance, but they certainly get repeat business.

If you find the best insurance companies to invest in, they almost come with a guarantee that you’ll make money over the long-term.

The key is honing in on the best underwriters, Porter Stansberry in Daily Wealth explains. This means that they always receive more in insurance premiums than they pay out in insurance claims.

Over the long-term, these companies earn great returns. And the good news is, people will always use insurance. It’s not a fad.

Even when the economy is bad, the vast majority will stay pay their insurance premiums.

It all comes down to the fact that insurance companies make money even when they’re not paying out. And they don’t need to borrow any money, unlike most other businesses.


Insurance companies use their customers’ money to make them money


What they do is take the money they receive from their customers as premiums and invest it in other assets. Insurance companies only invest in relatively low risk assets, like fixed-income, so they can cover any claims they have to make.

If you buy into well-run insurance companies and keep these shares for the long-term, your money should grow. Warren Buffett is a big fan of investing in insurance companies.

If you’re interested in investing in insurance companies, do your research. Make sure you buy at the right price. You don’t want to overpay for stock.

So there you have it, if you don’t know what stocks to invest in, the insurance sector could be for you.

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