Weekend Watcher: Investing Lessons From the Grim Reaper

Let's say it's 3 a.m., and you're watching an overseas-based stock analyst or portfolio manager explain why they like a stock. Most of the musings are the run-of-the-mill gibberish: Stock sports a low price-to-earnings multiple compared with the sector average, company is a market-share thief, it's the cleanest shirt in a filthy stinking batch of clothes, blah, blah, blah. Then, all of a sudden, the usually tightlipped stock direction predictor signs off with "the company operates in an unsexy sector." Hmm. You wonder, "Well, kind friend, didn't you just tell me how amazing an investment this stock was?" Then you catch a bit more shuteye.

I will actually side with the analyst here, though I rarely do so, as such a stock could indeed be one that you should investigate further after a couple heart healthy morning egg whites -- and I say "investigate" because you can't buy a stock off a hold rating. The only thing is that, instead of considering a sector as "unsexy," think of it as "slow-growth." In order to prevent having your ego handed to you on a silver platter, one must appreciate the attributes of investing in slow-growth sectors. They include the following:...735 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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