Emma Wall: Hello, and welcome to the Morningstar series, “Ask the Expert.” I’m Emma Wall, and I’m here at the London Investor Show with Morningstar columnist, Rodney Hobson.
Hello, Rodney.
Rodney Hobson: Hello, there.
Wall: So I wanted to ask you about three stocks that you liked at the moment?
Hobson: I’m looking at companies that have solid earnings, earnings growth, paying good dividends, good yields. And the three I like are GlaxoSmithKline (GSK), where with an aging population would always going to need pharmaceutical companies; United Utilities (UU.) and National Grid (NG.) in the utility side; again this is a defensive area where shares are secure or reasonably secure as one can be; and also Royal Dutch Shell (RDSB). Now these are all companies that I have a stake in. They’re all solid companies. They’re all paying good dividends. That to me is what people should be looking for, especially if they are thinking for the long term.
Wall: And of course, the great thing about income, especially those sort of solid, defensive style stocks that people who read your column will be familiar with, is that you can reinvest that income in the growth stage of your retirement plan, can’t you? And reinvesting that income, it can actually mean that you double your money in half the time?
Hobson: The thing about companies that pay a dividend is that you do have that choice. Yes, you can take the dividend and live off the income, great. But if you’re wanting to invest for the long term, yes, keep reinvesting the income and you have the option. And you don’t have to reinvest in the same companies, of course, you can put it into other companies if the stock market is looking that way.
Wall: Rodney, thank you very much.
Hobson: My pleasure.
Wall: This is Emma Wall for Morningstar. Thank you for watching.