An Unusual Reason To Avoid "Hot" Stocks

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Declaring that the market is in a bubble, growth stock hate, crypto hate, meme stock hate…

It’s all cope.

While I personally don’t invest in hyper-growth stocks or trade alt coins, I can’t begrudge anybody who makes money in those sectors. Good on these successful investors and may their winning streaks continue.

That said, I do not care about chasing capital appreciation or portfolio growth.

I invest for steady, recurring dividend income. And I always try to buy quality companies that should continuing paying their shareholders for decades to come.

Now that may sound like cope. But, my weird portfolio of insurance companies, tobacco stocks, hardware distributors, water treatment plants, electric utilities, foreign mining conglomerates, and car dealerships is up over 22% year-to-date and actually beating the market.

And that’s despite the fact that I made some “dead money” investments like The Procter & Gamble Company as well as some disastrous buys like Flowers Foods, Inc..

So if I’ve already admitted that market-beating growth investors are smart, and I cared enough about capital appreciation to include my own returns (even if it was just to clarify that I don’t have a case of “sour grapes”) why don’t I go all-in on hyper-growth tech companies or MAG7 stocks?

Simple.

Double dipping.

You may already be invested in the hottest stocks and biggest tech innovators, even if you don’t own any shares in these enterprises.

• Do you sell stuff on Amazon? You’re already exposed to Amazon.

• Do you run a YouTube channel or make money from Google ads or SEO? You’re already profiting off YouTube and Google’s parent company, Alphabet Inc..

• In direct marketing, products are usually sold at an 8x mark-up. If you direct market through Facebook or Instagram ads, you’re probably getting a higher ROI than you would from owning shares of Meta Platforms, Inc..

Likewise, learning to use many free AI tools can save you thousands, or tens of thousands, of dollars per year — a potentially better and more lucrative use of your time than speculating or AI startups and quantum computing penny stocks.

Unlike the steel foundries and oil refineries of yesteryear, many tech companies allow you to profit from their innovation without being a shareholder.

And sometimes, harnessing technology is more lucrative than investing in it.

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_{Stocks & Income is for informational purposes only and is not intended to be used as investment advice. Do your own research.}

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.