Patriotic Investing

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It's election season, and that means we're hearing a lot about our great country from political candidates. We're being reminded, for example, of the principles on which our government is based. We're seeing a lot of red, white, and blue.

It’s all enough to make me look back at the Declaration of Independence. Here's part of what I saw:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

Look at that through investing-colored lenses, and you might have some interesting thoughts. For example:

On equality
In investing, all investors are equal -- as long as they have money to invest. You can be a bus driver buying 10 shares of stock in Chevron (NYSE: CVX), or you can be a multimillionaire entrepreneur, buying 30,000 shares of the company. The company and the stock don't care -- the company often doesn't even know! -- who bought it, as long as somebody's buying and holding it.

All dollars are created equal, too -- and this can be an elusive concept for many investors. If you're looking to earn a 10% return on your money, you may leave it invested in some slumping Eastman Kodak (NYSE: EK) shares, waiting for them to rise again, hoping to make back the money you lost and maybe a little more. Or you can just sell those shares and move the money into a company in which you have more faith. You can make that 10% return in all kinds of places -- you just need to find the spots where, in your estimation, it's most likely to perform well for you.

Another way of looking at the thought above is this: All stocks are not equal. You stand a better chance of earning a strong return in some stocks than in others. Your research and thinking might suggest that Kodak is one of your best bets -- if so, hang on. If not, though, consider selling. You won't be alone in liking underdogs -- respected investor Bill Miller, of Legg Mason Value Trust (LMVTX), recently held some 7% of Kodak, along with shares of UnitedHealth (NYSE: UNH) and Qwest Communications (NYSE: Q) -- both of which have fallen around 50% this year.

On liberty
Considering liberty, note how free we are in this great country to invest as we'd like. We can park our hard-earned money in an index fund, quickly and easily earning the market's return. If we want to aim higher, we can opt for a managed mutual fund, such as the T. Rowe Price Media & Telecom (PRMTX) fund, with its market-trouncing five-year average annual return of 12.7% and top holdings that recently included Sprint Nextel (NYSE: S) and Electronic Arts (Nasdaq: ERTS).

If we want to aim even higher still, we can look into individual stocks, the best of which can perform even better than the best of mutual funds. Halliburton (NYSE: HAL), for example, has rocketed ahead by an annual average of 18% over the past five years. (Over the past decade, its average is more sedate, at 8.6%.)

On happiness
What does investing have to do with happiness? Well, I've tackled the topic before, noting that you actually sort of can buy happiness with money. Investing for your future can set you up to be able to get and do the things you want to get and do in your later years. It can make your retirement days much more comfortable.

On governments
Finally, events on Wall Street over the past few weeks should have driven home the value of our government and how it needs to help us keep our rights and attain our goals, with our support. We might be in a financial pickle right now, but our government is taking steps to get us out of it. We've written extensively on these matters -- check out our commentary about the bailouts, what the $700 billion rescue means for you, and how to protect your portfolio.

Remember that no matter how messed up our economy might seem right now, we've still got one of the most effective and longest-lasting governments around, and that our stock markets and their regulations are hard to beat, too.

Oh, and perhaps take a few minutes to reread the Declaration of Independence, too -- it's rather inspiring.