Banks and oil companies make the most profit according to government figures?

Question

So why should I not invest in them? What should I invest in? I want to survive my life and a mechanic's pension is not all that much. I would like to reasonably invest. What should I do?

Answer 1

I personally think banks and oils are very good investments. Banks give more consistant earnings than oils do, or at least have in the past. They also have the tendency to raise their dividends year after year after year. Which helps.

But do not invest everything you own in oils and banks. That is just too dangerous. Who knows what might happen. Maybe no more that 10% of your assets in each. Other areas to consider are Chinese stocks and Indian stocks. Both countries are growing a whole lot faster than the U S, and the dollar is not the healthiest of currencies. There are funds that invest in both countries. TDF and CHN in China. IIF and INF in India. There are others also. Next invest some of your money in European stocks and some money in Japanese stocks. For example Toyota and Canon. Finally, always have a healthy cash reserve just in case the market should crash on you. T-bills is a good place to park your cash.

Answer 2

You should invest your money not in the firms that have MADE the most money, but rather will make the most money at the best available price.

Read "The Intelligent Investor," by Benjamin Graham. I strongly recommend it. A few things are dated since the book was last published in 1972 but I can promise you anyone on Wall Street who is of any importance has read this at least once and may have read it many times. It is a book written for the general public and it has stood the test of time, being first published in the 1940's. If Graham were alive today, it would still be on the best seller list as each new addition came out.

Answer 3

There is no reason to avoid investing in banks and oil companies.

Both have their risks, though. Oil in particular is known to have years when profits are low, and others when they are very high. Also, it is a capital intensive business, so a lot of the profits are used to buy more stuff for the business, not returned to the shareholders. From a shareholder's point of view, this is kind of a pseudo profit.

I generally recommend to new investors that you make your first stock purchase in the stock of a company whose products you use and like, and which pays a dividend. It feels good to get a dividend check. Local electric companies often fit that requirement, but there are others.

If you like their products, chances are others do too, so it's likely a solid investment.

Answer 4

If you do that you will die with millions of dollars.