Before I start talking about this one stock that you should own thru retirement let me explain that you should never own only one stock. You should have a diversified portfolio of stocks that can weather all sorts of financial storms. That being said, you want to fill your portfolio with great stocks. This is the type of stocks I’m talking about. The type that you want to hold forever. If you were to only buy one stock what would it be? Of Course, there isn’t only one right answer, but I’ll try to convince you why you should be holding this one stock forever.
General Electric Co (GE)
There you have it. If you read no further and go invest in this stock today you’ll most likely do well in the long run. But why would you not do your research, right? So let me just give you a bit of information on GE and you can then decide for yourself.
First, let’s start with a trivia question type fact that you may not know about GE. Did you know that GE is the only stock on the Dow Jones Industrial Average today that was also part of the original 12 back in 1896? That’s well over a century of proven track record. A record that might never be surpassed, or at least certainly not in our lifetime.
If that doesn’t seem relevant to you then just think about this. The S&P 500, which is about half as old as the DJIA, has less than 20% of the original 500 companies that formed the index. That means that more than 4 out of 5 of the companies have either merged, gone bankrupt, or are no longer relevant to be included in the index for whatever reason. With these kinds of numbers it doesn’t make sense to hold everything forever. This is an example of why you should always be analyzing your investments and redistributing them to better options.
General Electric is the leading American multinational industrial conglomerate
The being said, GE has proven to be one of the better options. GE made it through the financial crisis we had almost a decade ago, and it’s likely to continue trucking along for the foreseeable future. If you don’t recall GE was one of the companies that got “help” from investor Warren Buffett. In 2008 when GE stock was getting hammered during the financial crisis Warren Buffett’s Berkshire Hathaway agreed to invest billions with them. Of course, when Warren Buffett talks people listen. At the time GE stock was in the low 20s. Today it’s in the low 30s, almost a 50% increase.
However, don’t let Warren Buffett’s backing and confidence alone convince you to invest in GE. If you dig a little deeper you’ll find that one of the main reasons why GE needed a “bailout” in the first place was because it had grown its financial arm so quickly that it was starting to look a lot more like a bank than an industrial company. The good news is that this section of the company is no longer growing as they have systematically either sold it off or wound it down. GE is once again focusing itself as a true industrial giant.
GE the Giant
Speaking of giants, if you take a closer look at the industry that GE is in you’ll notice that they are far and away the leader in this group. Looking at companies in the industrial conglomerate section you’ll find that GE has almost a 300 Billion market cap. What does the next closest company have in market cap? About a third that amount, 3M Co has a little over 100 Billion Market cap.
Those numbers are staggering, but if they’re not enough then dig even more into the industrial sector and you’ll notice that GE has the largest market cap even when looking at all industrial companies instead of just the industrial conglomerate subsection. The next largest market cap company being Visa at almost 200 billion within the Professional and commercial services subsection of the industrial sector.
Dividends (and Thomas Edison)
One last thing to mention about Ge is that it pays out a nice dividend. At almost 3% yield today that’s not too bad at all especially in this low yield environment we have today. And here’s another fun fact for you, did you know that Thomas Edison, the inventor of the light bulb, was one of the founders of GE? I’ll put my money on GE’s future and so should you.
I tried to resist but I can’t not put a stupid joke in here. It seems to me that investing in GE might be a bright idea. Gosh that was dumb… But investing in GE is far from it.