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Stocks you know make great investments

Sep 1, 2021   Category: Advice, Education

If you’re like me you probably don’t have a lot of extra time to spend researching stocks. There are thousands of stocks to choose from. The New York Stock Exchange has 2400 listings. Going through each one to find a good investment would take thousands of hours of time. For a professional that might be okay but for amateurs who work 9-to-5, that’s never going to happen.

There’s a common myth that to be a successful investor you have to find the stock that no one else knows, except you. That you alone see its greatness. As a result of your reading thousands of annual reports you find the stock picking equivalent of El Dorado. It’s a myth and a waste of time.

Some of the best performing stocks are companies that you already know. For example, Google is one of the most recognizable brands in the world. If you search the internet, you use Google. You may have used it to find this site. Everyone knows Google. However, that doesn’t make it a bad investment. Actually, it makes it a great investment.

Looking at Google’s share price performance you’ll see what I mean.

Had you invested $10,000 in Google in 2004 it would now be worth $577,860

In 2004, when Google first listed you could have bought a share for $50. If you had bought $10,000 of Google shares today that would be worth $577,860. That’s a massive profit from a company that if you were alive in 2004, you would have known.

It’s tough to resist the urge of seeking out the mythical El Dorado stock. However, those who resist the urge will be rewarded.