Tap and Fibrous Root Systems of Stocks
Integration is better than diversification during lean times on the stock market. You can try to beat an economic cycle by putting eggs in several industries and sectors. However, fixed costs of infrastructure and operations hurt as GDP growth approaches zero. Subsidiaries around the world massage a CEO ego. They can gnaw at your stock value when a new dictator surfaces in a distant land.
That is why HCP Incorporated (NYSE: HCP) stock makes more investment sense than General Electric (NYSE: GE). Both corporations are in health care. However, GE is also in finance. It has fingers in many other pies as well. HCP is a stock from the Real Estate Operations Industry. It does not fiddle around with sub prime deals. All it does is to develop real estate for health care applications. That includes essential things such as assisted living for senior citizens. HCP is for, by, and of the United States alone.
The health care products and systems of GE are awesome. Our lives are literally in the hands of their scanners and other mind boggling diagnostic equipment. Your physician would probably be nowhere as good if it were not for GE. However, what if the financial services, entertainment, or media service arms of this corporate octopus slip up? Bernanke will fire sell the stock to a competitor in a Sunday morning flash.
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