Home etftrends.com ‘Safe’ Stocks Are No Longer Safe in the Age of Disruption

‘Safe’ Stocks Are No Longer Safe in the Age of Disruption

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Imagine losing 20% of your nest egg in the market.

For many folks it’s just gut-wrenching. So investors often pay giant premiums to buy stocks they believe are “safe.”

You probably know that fast-growing stocks in exciting industries may be pricey. But boring, slow-growing stocks are often expensive, too—if they’re perceived as safe.

And while you might not realize it, there’s a good chance you’re paying through the nose to keep your money safe.

The “Safest” Stock on Earth

You Must Pay Dearly to Own Safe Stocks

We’re Living in the Age of Disruption

Take Procter & Gamble PG [NYE] – $103.65 0.22 (0.21%).

It’s a 200-year-old company that’s grown into the 15th-largest publicly traded company on earth by selling essentials.

Its brands include Gillette razors, Tide laundry detergent, Crest toothpaste, Dawn dish soap, and Bounty paper towels.

No matter what happens in the markets, we’ll always brush our teeth, wash our clothes, and clean the dishes. That’s why selling necessities is a rock-solid business.

From 1982­–­2012, Procter & Gamble grew its sales 28 out of 30 years. This track record is why P&G has long been considered one of the safest stocks on earth.

P&G trades for roughly 25X its profits.

That’s very expensive for a business that’s seen profits drop 20% over the past decade. For reference, the average S&P 500 company trades for 21X profits.

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