Investing in U.S. Companies
With the rise of competitive global companies, U.S. companies can sometimes get overshadowed in the headlines. However, don't forget about domestic companies when filling out your investment portfolio.
One good investment strategy is to put your money in blue chip companies. These are companies which are deemed to be stable and profitable, whatever the economic circumstances. According to the influential firm UBS Financial Services, a company should meet four out of six criteria in order to be considered a blue chip. Among these criteria are that it be a leader in its market niche, have at least $5 billion in market capitalization, have a reputation for providing high quality goods and services, and have a record of profit growth.
To find blue chip companies, look for companies that are listed on the Dow Jones Industrial Average. This index shows how 30 reliable U.S. companies have performed during a day of trading, and is thus often taken as an index of the market's performance as a whole. Most of these companies are no longer in the industrial sector, in spite of the name. These blue chip companies include the office technology company 3M, Walt Disney, Microsoft, the manufacturer of construction equipment Caterpillar, and The Home Depot.
Another, more cutting edge category of American companies is the green chip index, which denotes companies that are riding the wave of green technology. This index was founded in 2004 by entrepreneurial investor Jeff Siegel. While these companies are not yet as reliable as the blue chips, they also have more room for growth.
One of these future-oriented green companies is Applied Materials, which made its name producing capital equipment for makers of semiconductors, according to Kiplinger. It then turned to LCD flat panel displays, another profitable industry. Its green outlook includes photovoltaic cells, which are vital to solar power, and the tools to make energy-efficient glass.
Another green company to watch is the Florida Power and Light Company, which in addition to standard utilities, produces approximately 40% of current wind energy output in the U.S. according to Kiplinger. Its relative lack of coal plants will put it in an advantageous position if U.S. regulations on coal emissions tighten up.
Always be informed on what your money is doing. The NASDAQ stock market index is a reliable place to turn for stock quotes and news articles related to publically traded companies. What you do with the information after that is up to you.