Watching grass grow is boring. So is reality TV. But is your investment portfolio boring, too?
If that’s how you describe most of the stocks you own, then according to Paul Harris you’re doing something right.
“We
do nothing but boring stuff here,” he says, describing his investment
philosophy as a portfolio manager for Avenue Investment Management in
Toronto. “For us, a company that slowly plugs away and pays a nice
dividend is not boring. It makes the stock more attractive.”
Boring is beautiful?
Years
of research have shown that slow-and-steady stocks often outperform
flashier offerings, producing solid long-term earnings. That’s the kind
of low-volatility performance that people who are saving for, say,
retirement should own, says Jason Whiting, portfolio manager for Trimark
Investments in Toronto.
It’s a simple
matter of investor psychology. When an investment swings wildly year to
year, even if it ultimately offers a nice 12-per-cent return over a
decade, many people can’t stomach it. They want off the ride too soon.
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