How insane is this an investment strategy?

[Weird Tolkienish Figure]

Just buy stock of products that you like and use?

Now I understand that there are other variables to be mindful of, some stocks are overvalued even if the products are good. My idea might be to only do this if the price is reasonable.

My thoughts are that if I like this product and service, other people will like them too.

Maybe let's say, if you spend money on a product and like it, just take whatever sum you spent on the product and invest in stock?

Insanely stupid idea or what?

And on the reverse, if you buy a product or have a bad experience in a store (or rather than judging from one bad experience, you notice an overall decline in quality), maybe it's time to sell?

[bjl584]

Probably not a good idea. Just because you like a particular product or service it doesn't mean that the company is healthy or that their stock is a good investment.

[JoeP]

Sounds a lot like betting on a horse with a quirky name, or one that you think winked at you as you walked past it. A better strategy would be to look for healthy companies with a good track history and in a healthy sector.

[feh]

Probably not a good idea. Just because you like a particular product or service it doesn't mean that the company is healthy or that their stock is a good investment.

+1

(filler)

[MarkInCA]

I think it's a great idea but ONLY IF you also look at the company's fundamentals before you jump in.

Using your own personal experiences with a product/company to decide whether to invest in it is totally sane, just as long as that's not the ONLY criteria you're using.

[BuckyBadger]

Sounds a lot like betting on a horse with a quirky name, or one that you think winked at you as you walked past it. A better strategy would be to look for healthy companies with a good track history and in a healthy sector.

And the best strategy would be to not pick stocks at all, but rather to invest in the whole market using low cost index funds.

[Weird Tolkienish Figure]

I think it's a great idea but ONLY IF you also look at the company's fundamentals before you jump in.

Using your own personal experiences with a product/company to decide whether to invest in it is totally sane, just as long as that's not the ONLY criteria you're using.

Agree 100%.

My idea is that if a company launches the product that is great, you realize the product or service is great or desireable, you might be ahead of the curve a little bit in realizing the stock is relatively undervalued. If you like it, chances are other people will too.

Don't rely on this 100%, but make sure other fundamentals are in place, it's well-run etc.

My idea is that if a miser like myself is willing to part with his hard earned money to buy the product/service, then loads of other people will be too.

[bigdaddybus]

As the "foundation" of an investing strategy I think its a bit insane, but as a contibuting factor into an investment strategy I think its a good idea.

I invested in Unilever years ago after being impressed with their products. Made a good amount on the stock and made 3.5-4% dividend along the way.

Unilever PLC offers its products under various brand names, such as Axe, Becel, Flora, Ben & Jerry's, Bertolli, Blue Band, Rama, Cif, Vim, Clear, Comfort, Domestos, Dove, Fissan, Heartbrand, Hellmann's, Amora, Knorr, Lifebuoy, Lipton, Lux, Omo, Pond's, Radox, Rexona, Signal, Closeup, Simple, St Ives, Sunlight, Magnum, Fruttare, Cornetto, Sunsilk, Surf, TRESemmé, Timotei, VO5, and Vaseline. The company was founded in 1885 and is headquartered in London, the United Kingdom. Unilever PLC is a subsidiary of The Unilever Group.


But jumping late on the bandwagon can be crushing, especially if you dont research revenue growth and other fundamentals. Diving into something like Chipotle Mexican Grill right now after its tremendous growth might not be the wisest move (I dont invest in CMG, it might be a good buy now, I have no idea)

[dcperilli]

I don't think it's that bad of a strategy. Companies do well if people like and buy their products, right? Seems like pretty simple business.

However, fluctuations in stock price can be the result of more than just earnings. Fluctuations can be because of company reputation, etc.

I would definitely make a list of those companies that you like, but also dig a bit into their financials and leadership. If you can check all of the boxes, go right ahead and invest.