1. Where have they seen prices going up?
Everyone complains about something. My pet peeve is the cable TV bill. We get internet access plus basic cable. Somehow the bill is up to $180 a month. Your client might have their own pet peeves. Grocery prices. New car prices.
What companies produce those products and services? If they can get away with pushing through price increases, would they be good investments?
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2. What products do they buy?
Your clients buy stuff. They buy branded groceries. Clothing. Lots of stuff at their local discount warehouse store. Why do they buy these products? Either they need stuff or they feel it’s a good product. Maybe both.
They know they are a market for these products. They aren’t a market of one. Would the manufacturers of these products be a good investment?
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3. Where do their kids spend money?
Their children spend money differently. Parents often consider their offspring wasteful. They might not be shopping in malls at the moment, but they are doing it through online stores. They play online games. They buy clothing. They might buy meal kits online.
If they think their children are spendthrifts, where is the money going? What companies are the recipients?
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4. Where is it hard to find a parking space?
It’s an old investing adage. Invest in things you know about. You drive up to the home improvement store on a Saturday and can’t find a parking space. Same story with your warehouse store. My wife complained she stood in a checkout line for 55 minutes recently.
It would appear people are falling over themselves to hand these companies money. Are they good investments?
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5. What are things they wish they could afford?
Studies have shown we see more than 6,000 ads per day. Your client sees things they would like but can’t afford. Car ads are probably a good example.
Are these companies good investments? Your client might not be able to afford the products right now, but they could own part of the companies.
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6. Are they addicted to home improvement programs?
HGTV is pretty popular. We all have opinions. “What do they need five bedrooms for?” Lets not forget “I wish you could take this bigger house and move it to my current neighborhood.” What goes into these home renovations? New appliances, carpeting and furniture, to name a few things. There are big public companies making this stuff. Often they are advertisers or mentioned in the credits.
Would these firms be good investments?
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7. Where will the new administration direct spending?
With a new administration comes new spending priorities. Where does it look like the government will be spending money? Think about the “Space Race” of the 1960s. What sectors of the economy (and the stock market) should benefit? Is climate change a big priority? How about a shift to electric vehicles or renewable energy?
Which companies does your firm think will be likely beneficiaries?
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8. Where does the government spend lots of money?
Congress talks about the budget, yet lots of spending is connected to ongoing programs. Defense is a good example.
What companies does your firm like that might be beneficiaries of federal spending?
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9. Trends: How about health care?
Years ago, there was an investment concept that looked at the post-World War II baby boom and tracked what boomers, and their parents, spent money on as they aged. That might be a good example of a trend. Now baby boomers are reaching retirement age. The older you get, the more health care you need.
Does your firm think health care sound like a growing sector? Your client might have firsthand experience or know someone who has.
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10. Who do they think are the smartest investors?
Investors often have a love/hate relationship with Wall Street. You know the statistics about equity returns over time. Clients hear about Wall Street bonus payments. What firms do they think have the smartest people? The highest paid traders and investment bankers?
Those firms might offer separately managed accounts on your firm’s platform. Get them working for you.
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11. What’s their most admired company?
Millennials are known for social responsibility. There are firms doing good things like pledging to be carbon neutral. Other firms give generously to charity.
What firms does your client think are seriously trying to make the world a better place?
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12. What’s been their favorite stock of all time?
This is one of my favorites. Most investors have a stock that’s “been good to them.” They’ve traded in and out over the years. Maybe they still own it. How is it doing now?
Your client might decide it’s time to buy more. Avoid the problem of concentrated positions.
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February 18, 2021 at 03:34 PM
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