Diversifying your Portfolio Pt.2

Hello! I talked about diversifying your portfolio in an earlier post. To see it click here. Today I’d like to talk more about diversifying your portfolio. Particularly throughout different industries. Those who invest all their money into one industry, maybe the fast-food industry for example, will make lots of money if the demand for fast food goes up, but they’ll also lose a ton of money if the demand goes down. It’s a whole lot safer to invest in as many industries as possible. All of the stocks I own are involved in different industries, including the social media industry and the electronics industry. Let’s go back to the fast food example. Say a person named Jonathan has $1000 he’d like to invest. He notices that stocks in the fast food industry have been going up steadily for quite some time. He puts all of his money into 10 different fas food companies. The next day he finds out the his portfolio is only worth $250. All of his stocks went down because of the discovery of an unhealthy ingredient found in the food restaurants like McDonalds and KFC serve. Now let’s say Jonathan had invested $ 100 into the fast food industry, $100 into the electronics industry, $100 into the entertainment industry etc. He would have lost $75 from the money he’d put into the fast food industry but maybe overall he gained money from all his other stocks. This is the reason why diversifying your portfolio is extremely important.

That’s all for now, Ben

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Foundations of a Great Company – Nike

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Company Name: Nike Inc.

Ticker Symbol: NKE

Founders: Bill Bowerman, Phil Knight

CEO: Mark Parker

 

Nike Inc. was founded in 1955 by track athlete, Phil Knight, and his coach Bill Bowerman. In its first year the business made only $8000 but in the second year it made over $20 000 and has been growing steadily since then. In 1966 Nike opened its first retail store. By 1971 Nike was using the famous “swoosh” logo. Today Nike is worth $96.71 billion and has over $20 billion in assets. Their revenue in the past 9 months equals more than $24 billion! In the 9 months before that Nike made $22 billion, which demonstrates how quickly they grow. Nike has $8.6 billion in debt but that’s nothing based on its immense size. In the past 10 years or so Nike entered the technology industry, since then it has partnered with Apple to create iPod Nana Nike Technology and has also created Nike Fuel Band as well as the app Nike+. This was an intelligent move for Nike as the technology industry has been growing steadily for years. The Nike logo itself is brilliantly designed. The “Swoosh” hasn’t changed much since it was first introduced, and for good reason. People from all over the world can easily recognize the famous logo. Nike has even introduced customizable shoes on their website http://www.nike.com. Although the Nike stock has been going down recently, overall it has grown a lot. Just look at the chart below.

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If I were you, I’d definitely find the money to invest in Nike.

That’s all for now, Ben

P.S. Have a company you’d like to suggest for the next Foundations of a Great Company blog post? Tell us below now and your idea could be featured in a new investing post.

 

Finding the Right Investment

Finding the right investment can be difficult. There are a lot of companies to chose from. When you’re just starting to invest, long term investments are usually the best. The only problem is long term investments usually involve investing in blue chip companies, which can be quite expensive for a beginner investor. Try saving up your money and investing in big companies with somewhat low stock prices such as Microsoft, Mattel, Starbucks, and Nike. Don’t go for big investments like Google and Amazon unless you have thousands of dollars to do it. When you’re looking for a great stock to invest in, think about the companies you already love. Do you think  they’ll grow. If you like the company and you’ll think the company will grow more in the future do some research. Find out things like how much debt they have and where their CEO went to university. Companies that you like are bound to be liked by others too. One very important thing to do is to never invest in an industry you have very little knowledge about and aren’t interested in. It’s always safer to invest in an industry you know a lot about and are interested in. Even the top investors refuse to invest in something they know almost nothing about.

That’s all for now, Ben

The Wok Box

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The Wok Box is an Asian cuisine, fast-food restaurant.They sell several different items in boxes for takeout. We decided to try this place after seeing similar food on The Big Bang Theory. When I first arrived I was disappointed by the menu items available. None of them really seemed tasty to me and they didn’t look that different from one another. I ended up ordering the Butter Chicken, which I felt was pretty overpriced. It was about $7 for a small box and the large was $15. The service took a long time. After waiting a about 10 minutes, the food finally was ready. The meal was good, although I didn’t feel like it was worth the money. My medium sized box came with a lot of food in it but most of it was just rice. I was disappointed by this place and likely won’t return. I’d recommend trying this restaurant if you never have before but otherwise I’d go somewhere else.

That’s all for now, Ben