Let’s be honest.  No matter how often you hear that the stock market is easy to understand and get involved with, it really isn’t.  I’m not saying that it’s impossible nor am I saying that the average investor shouldn’t be involved.  Instead, I want you to make intelligent choices about how you do it.

If you enjoy business and love the thrill of the 24 hour news cycle and have a lot of time to read and research, you may be able to get involved in the more risky plays but if you’re like many; you have a job, a family, hobbies that you like more, and when you hear the word, “research”, you run the other way, then something a little lower in the maintenance category may be best for you.

Don’t worry.  Over the course of the next few weeks, we at elementary-finance are going to start a fund of 5 stocks just for you.  These stocks are not for the person who is going to watch them every day.  These are medium term stocks.  By that, I mean that we are going to hold these stocks for 1-5 years.  We don’t like the idea of holding on to a stock without watching it for decades but for many, short term stock trading isn’t appropriate either.  Medium term allows us to reinvest our money once a certain stock in our portfolio runs it’s course.  That will often be doubling in value or even tripling if we do it right.

The only research we are going to do is a little bit of reading on Yahoo! Finance and a view of the chart every once in a while.  These stocks will be from companies that you have heard of, they will pay a dividend, and they will be so undervalued that we can’t help but make money as we’re patient.  Remember patient means that we don’t care if over the course of a day or two the stock drops in value.  We are looking longer term.

Are you ready for our first pick?  Let’s take a look at General Electric. (GE)  GE was one of the companies that was crushed by the economic downturn.  Many people don’t understand why a company who makes medical equipment, aircraft engines and wind turbines would have gone from over $40 all the way down to $5.73.  It’s not what they make.  It’s a pesky little part of GE called GE Financial.  They make loans and we know that the financial meltdown was largely due to bad loans.

GE has doubled from it’s low on March 4^th but I believe that there is more upside.  A lot, in fact!  The first reason is that GE is making it a point to reduce their dependence on their financial arm.  Their CEO said just this week that GE financial is worth around 20 billion but that may be a little high according to analysts.  None the less, they are concentrating on making breakthrough products and that has people excited.

The next reason is green!  If you didn’t hear, a large scale bill was passed that is going to require at least 15% of our nation’s energy be produced by alternative means by 2020.  Green energy.  This puts companies like GE in a prime spot because GE is one of the largest producers of wind turbines.

Don’t forget about the 3.4% dividend yield so you are getting 10 cents a share (as of June 27, 2009) as you wait for your stock to double and even triple in value over time.

If you have $10,000 to get started in your portfolio, buy $2,000 worth of GE.  I’m going to round it off and buy 200 shares.  That is about 20% so adjust your purchase to keep it about 20% of your portfolio.  We’re buying at $11.75 as of today’s date.

Finally, remember that we don’t care what the price of a stock has been in the past.  We’re only looking at the future and I believe that GE has a huge amount of upside in it.  It has a lot of work to do before we see it but since we’re in this for the long haul, we don’t care to wait.