monopoly companiesMonopolies are some of the greatest investments in the world, especially for long term investing. The more a company controls a market percent wise, probably the better chance they will be in business for a very long time. There are many types of monopolies that can exist, but due to federal regulation, there are fair competition laws and only some monopolies can exist like natural monopolies. Natural monopolies include companies like your power company and your water company that you have in your own town. The reason they are natural is becasue it would be almost impossible to compete with them; at least unless you were very rich but they are also natural and necessary to people. They have power lines in all the right places and even if you did have the power how could you build all the lines etc.?. To protect society the government lays down laws that keep them from price gouging. Without laws like these your power company could be charging you 10 times what they charge now especially in places like Montana where I live-gets cold in the winter and people would be forced to pay. Now what about investing in energy companies and companies like them? retirement investing More about investing in stocks in monopoliesThey are great for the long term smart investing and reasonable returns. They also usually provide a lot of income in dividends since they have little to BUY IN ASSETS or research. Remember most power companies as an example, don't spend much of their cash per share on more assets this would be a waste of time since they have all the assets they need in power lines and equipment. Just to give you the power they have is really all that they need to generate their stockholders some healthy income. Sometimes these companies may TRY to buy more companies to expand. Expansion is the biggest problem for monopolies and especially natural monopolies since they are about as big as they can get. They make great INCOME investments too for the income investors out there. As you can see monopoly companies can be handy for long term income investors and retirement investing as they are impossible to compete with usually. young investor |