Reduce Risk With Recurring RevenuesReduce Risk With Recurring Revenues
The advantages of owning stock in companies with the potential to generate sustainable income
With stock markets around the world near record highs, trustees are pondering whether and how to de-risk portfolios. This situation poses a quandary, as traditionally safer asset classes, such as high quality bonds, offer little prospective return. Yet, some traditional options at the higher end of the risk spectrum—high yield bonds or dividend stocks—are unusually expensive at current levels. Because it can be difficult to predict the direction of markets and make judgments about the macroeconomic environment, one approach is to invest in companies that can march along, regardless of the economy or whether the market is up or down.
More than a century ago, K.C. Gillette came up with a plan: Have customers buy one razor, but sell them an ...
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