I’ve been fortunate enough to meet and learn from some extremely intelligent (and wealthy) people over the years.
No two journeys to success were the same. One had 100% of his assets in his business before he retired, while another is almost entirely invested in local real estate. Others have invested in things like mortgages, distressed companies, and, of course, stocks.
Even though each journey has been different, there’s one common theme among these wealthy folks: patience.
They all stressed that it took time and a lot of hard work to get to the enviable position each enjoys today. Starting early was important, of course, but the key to success wasn’t just doing smart things but continuing to do these things over decades.
None swung for the fences. The business owner expanded slowly, researching each new market in great detail before doing so. He avoided using debt as well, choosing to self-finance whenever possible. The real estate investor made sure he paid off each property before moving on to the next one. Sure, both might have been more successful if they were more aggressive, but the conservative route ensured mistakes wouldn’t hurt — at least, not too badly.
I’m convinced that one of the biggest factors hurting investors is a lack of patience. Rather than looking for a solid stock that will pretty predictably return 10% a year, we spend too much time looking for the new hot technology play that has the potential to triple.
Embrace boring investing, like with these three stocks. They won’t win you many impressed fans at cocktail parties, but your wallet will thank you.
1. Rogers Communications Inc.
Yes, I know Rogers Communications Inc. (TSX: RCI.B)(NYSE: RCI) has had some problems lately, but this company deserves a spot in any portfolio.
As Canada’s largest wireless provider, it has well over 30% of market share nationwide. It also has a dominant phone, cable, and Internet business in Ontario, and owns a smorgasbord of media assets, the Toronto Blue Jays, and 37.5% of the Maple Leafs and Raptors.
It also pays investors a 4.1% dividend, and has raised its payout to shareholders every year since 2005. Look for dividend increases annually for the foreseeable future.
2. Suncor Energy Inc.
The case for owning Suncor Energy Inc. (TSX: SU)(NYSE: SU) is simple, but compelling. The oil sands is perhaps the most important resource in the country, and Suncor is the largest player in the region.
The price of oil is going to bounce around. But over the longer term, it’s hard not to be bullish on the commodity. There are millions of people in India and China who will be able to afford a car over the next 20 years, as each country develops a larger middle class. They’ll also be able to better afford to travel. This is undoubtedly bullish for oil.
Besides, even billionaire investor Warren Buffett has a position in Suncor. He’s on record saying he’s a long-term bull of both the company and the oil sands. You could do a lot worse than copying the Oracle of Omaha.
3. Royal Bank of Canada
The Royal Bank of Canada (TSX: RY)(NYSE: RY) is Canada’s largest financial institution, with assets of nearly $1 trillion. The company has more than 1,200 branches in Canada, 439 in the Southeast United States, and a large presence stretched over 17 different countries in the Caribbean. It’s older than Canada itself, having started operations in 1864.
Royal Bank’s biggest strength comes from its Canadian retail operations, which are easily the best in the country. It’s also Canada’s largest investment banker, and has a terrific wealth management business. Oh, and the company has paid a dividend continually since 1870, the year after it got its federal charter. Shares currently yield 3.7%.
It’s simple. All investors need to do is hold high-quality stocks like these three, wait patiently, and eventually they’ll end up doing well. What are you waiting for?
