Investing may be serious business, but having a little fun with it could actually benefit your portfolio.
In a recent issue of our Motley Fool Rule Breakers newsletter, Fool co-founder David Gardner pointed out that it's important to enjoy following the companies in which we invest. If it's a chore to read your holdings' annual and quarterly reports, or follow their latest news, you just won't do a good job of it.
Who are you?
David asked investors: "What do you love? Who are you? What do you want from this world?" Those key questions can help you zero in on the companies that may serve you best.
Some businesses clearly seem more fun than others: Activision Blizzard (Nasdaq: ATVI), for example, is in the fast-paced video game business, while Campbell Soup (NYSE: CPB) makes, uh, soup (among other things). But for some people, even soup can be fun to follow.
The Ethisphere Institute also recently named Campbell Soup one of the World's Most Ethical Companies for 2010 -- along with several dozen others, including Adobe (Nasdaq: ABDE) and National Grid (NYSE: NGG). That sort of news could easily get fans of socially responsible businesses fired up.
Other investors might enjoy watching companies cater to Americans' greater interest in healthful fare. PepsiCo (NYSE: PEP) and Kraft (NYSE: KFT) are just the latest big food companies announcing plans to reduce the sodium in their offerings. If you really believe in what these businesses are doing, you'll likely want to keep up with their progress.
Just don't forget about price
While you definitely want companies you'll enjoy following, you also need to buy them at attractive prices. For a rough idea of whether a given stock is a bargain, compare its current P/E ratio or price-to-sales ratio with those metrics' historic ranges. If a company's current number is 16, and it's swung between 12 and 36 over the past few years, it would seem relatively inexpensive.
Seek good values and good fun in your investments. Your portfolio might thank you for it.
What kinds of companies are most fun for you to follow? Let us know in the comment box below.
