Personal Finance and Investing

And that reason is they are generally large, well established companies that weather the good times and bad, and are profitable over the long term.

I tend to look at these issues thus;

How different would our world or our lives be of there were no Proctor and Gamble, for instance? Or 3M or GM or GE (although GE has struggled seriously in the last few years and was actually removed from the Dow 30 industrials, the last of the original 30 when that happened) or Boeing, etc. etc.

Some could argue that we would not see a difference or that it would be an improvement, but I think there are certain advantages to having large companies providing goods and services that can stick around and not suffer serious losses every time there is a downturn.

There’s a difference between a “Large Cap” stock and a Blue Chip as well, and that is mostly longevity. Tesla is certainly a Large Cap stock, but it hasn’t been around nearly as long as General Motors (even though GM has had bankruptcy in the past) and does not have the production capabilities as Ford or The VW Group.


The pluses in investing in such issues is their ability to weather stormy seas. The minuses are the same with all individual issue stock investing.

Ever heard of Woolworths? General Railway Signal? Victor Talking Machine? Those were among the 30 original Dow Jones Industrial Average of 30 Industrial Stocks. Large companies can and do go out of business, go bankrupt or get absorbed.

Since the common wisdom is to broadly diversify a portfolio when it comes to investing, and since none of us has a crystal ball in which to see the future, the average or casual investor is typically better served by purchasing a collection of such issues, either via a Mutual Fund, an Exchange Traded Fund or any of the other methods of accessing such markets available to the retail investor.

Having said all that, there is certainly nothing wrong with buying individual shares of a company with which you have a favorable opinion. Just try and do your own due diligence, understand the risks involved in purchasing such securities, and as the old saying goes, don’t put all your eggs in one basket!

Good luck, and may all your trades be net gains!