How to Make Money and My #1 Long-Term Stock

Posted: Feb 13, 2015 12:01 AM
How to Make Money and My #1 Long-Term Stock

I attended and presented at the World MoneyShow in Orlando, Florida, last week. It was great meeting with investors, hearing their takes, as well as their concerns about the market — slowing growth and a stretched market valuation.

And, yes, it was great to get out of the cold that blanketed the District of Columbia and New Jersey during the last few weeks.

I shared my view on where the economy is and where it’s headed, as well as a few stocks that I find compelling given the current market. View that presentation from my website.

While being a featured presenter at the World MoneyShow last week, I also had the privilege of being a panel member on Making Money with Charles Payne on FOXBusiness. In addition to meeting Charles and the rest of the panel, there was an added element of fun in the show being broadcast in front of a live audience.

That also meant we the panel took a number of questions from the audience with topics that varied from what’s going on with Greece and how to play Europe to what our favorite stocks are currently.

The investor education didn’t stop there, as Charles queried the panel as to how we thought new investors should get started in the market, what our favorite sectors are for 2015 and how a person should construct a portfolio, as well as manage it over time.

Getting started means two things – first, making sure you have money to put to work in the market, which means you have sufficient savings to handle two to three months’ worth of bills, and are preferably contributing to your retirement plan.

Second, you’ve got to do your homework, and that means listening to the data – economic, industry and company food chain (the company itself, suppliers and competitors) to get a read on what is really going on.

Some find it easier to get started with exchange-traded funds (ETFs); others tend to favor individual stocks. The bottom line is one way or another, you’ve got to get started and get on the path to making money with your money.

When asked what my favorite stock was, my response was Qualcomm (QCOM).

I simply love the push-pull of the company’s chipset business and high-margin licensing-royalty business. The two lead to significant cash generation that has allowed Qualcomm to steadily increase its dividend and fund its stock buyback programs.

The core business – mobile and connective chipsets – is more fertile than ever as mobile connectivity moves from just smartphones and tablets to cars, the home, wearables, eHealth and industrial markets a la the Internet of Everything.

On the public company panel that I hosted at the MoneyShow, General Electric (GE) discussed the growth in its Internet of Everything business and how it sees no slowdown there. As good as Qualcomm’s business is, it’s only going to get better once it closes the pending CSR plc. acquisition that should boost its Bluetooth capabilities and round out its product offerings.

One audience member asked about what to do with his Qualcomm shares given the recent pullback. My response was to use it as a buying opportunity to scale into the position while, if possible, reducing his cost basis in the process.

Other recommendations I shared at the MoneyShow included American Water Works (AWK), the largest publicly traded water utility (and what I call a “Dividend Dynamo” because of its dividend-increasing track record).

American Water Works is in a great position to consolidate the fragmented water utility industry and benefit from the need to upgrade the U.S. water infrastructure, which received a grade of D- from The American Society of Civil Engineers.

These are some of the winning investments that subscribers to my newsletter Growth & Dividend Report (formerly PowerTrend Profits) have enjoyed. I’m thrilled to share them with you, but my latest picks are reserved for my subscribers.

Options and Your Long-term Growth Needs

No matter how young or old you are, the hard reality is that you need to grow your money. If it’s your savings, travel or vacation fund, college savings or retirement money, you know you need to grow it. Even if you’re lucky enough to be one of the people enjoying their retirement, the fact that we are living longer lives, feeling the pinch of high medical costs in our twilight years, means you need to continue growing your nest eggs even after you stop working.

As I shared on Making Money with Charles Payne, even though you may skew your holdings to more safe investments as you age, you still need to have growth exposure. Options are a viable way to do this, in part because the greatest risk you have is the value of the options contract. No wonder more than 70,000 people have started trading options in the last year. I talk more on the subject in my new interview with Eagle Financial Publications Publisher Roger Michalski. To read the transcript – and learn more about trading options – just follow this link.

In case you missed it, I encourage you to read my e-letter column from last week about playing snow and cold pains for quick gains.