Don't Freeze to Death

Written by Jimmy Mengel
Posted December 6, 2018 at 3:54PM

Last week I brought you the harrowing story of the Donner Party. The pioneers are infamous for chasing the American Dream by moving across the country in covered wagons and attempting to start a new life in California.

It didn't end well...

They burned their place into American History by eating one another to survive.

This week I’m going to show you how to weather any stock market storm, and save you from cannibalizing your portfolio.

Let’s pick up where we left off...

At the beginning of November, the Donner Party reached the Sierra Nevada mountains…

They were almost immediately trapped by massive snowfall around Truckee Lake – now cruelly renamed Donner Lake – around 11 miles from Lake Tahoe.

They built makeshift cabins and survived as best as they could on the meager provisions that they’d had left. Some packed all that they could onto mules and rode off to find help at the nearest fort. Most of those members survived.

Those who tried waiting it out didn’t fare so well…

In the end, of the 83 members of the Donner Party that were trapped in the mountains, only 45 survived and reached California. Dozens were cannibalized. It goes to show you that you really don’t want to run out of food — just like you don’t want to run out of money during retirement.

With a similar November/ December stock blizzard upon us, you’ll need the following things for any pioneer journey or any stock portfolio…

Tools

I shouldn’t have to explain the importance of tools to you. When a wagon breaks down, you’ll need tools to fix the broken axles. When a felled tree is blocking your path, you’ll need a saw and an ax to remove it.

When you need to create a makeshift cabin to hole up in for the winter, you’ll need carpentry tools like hammers, nails, mallets, and planes.

Tools aren’t going away.

And there’s one company that’s been there almost since pioneer times to meet those crucial needs…

Illinois Tool Works Inc. (NYSE: ITW)

Illinois Tool Works manufactures and sells industrial products and equipment worldwide.

It’s now one of the best-performing dividend stocks of the last century. It’s flourished through wars and recessions and has expanded its businesses around the world. The company is not only a dividend aristocrat; it’s also a dividend king. This means that it’s had over 50 years of consecutive dividend increases.

Had you invested 20 years ago, you’d be sitting on an astounding 510% return, turning $10,000 into $61,095.

Medicine

Whether you’re on a cross-country journey in a wagon or not, at some point, you’ll need medicine. Thankfully, medicine has come a long way since the Oregon Trail days. The leading cause of death on the trail was Asiatic cholera. You could seem fine in the morning, but you’d be dead by the end of the day.

Insect bites, snakebites, scurvy, malaria, and dysentery plagued the westward settlers. And all of these had to be addressed. Out in the wilderness, people hauled questionable medicines like essence of peppermint, pine tar and turpentine, castor oil, laudanum, quinine tea, vinegar, and the cure-all: whiskey.

These days, companies like AbbVie Inc. (NYSE: ABBV) are addressing far more vexing diseases and conditions…

AbbVie is a relatively new company, but it has deep roots. It was one of two divisions created when Abbott Laboratories split and started trading under ABBV at the start of 2013.

Abbott Laboratories grew from the business of Wallace Abbott. In 1888, the physician and drugstore-owner isolated the active parts of medicinal plants, such as morphine, quinine, strychnine, and codeine, which he formed into granules and sold to the public.

It’s among the top-five pharmaceutical companies by market cap. Its focus is on immunology, oncology, neuroscience, virology, and a handful of targeted investments in promising research for other potential drugs.

Long term – if you count their time with Abbott – the company has declared 378 consecutive quarterly dividends since 1924 and has increased the dividend payout for 46 consecutive years.

That is a company you can count on...

Food

To survive the long journey, a family of four would need 600 pounds of flour, 120 lb. of biscuits, 400 lb. of bacon, 60 lb. of coffee, 4 lb. of tea, 100 lb. of sugar, and 200 lb. of lard. These would just be the basic staples. Other foodstuffs could include sacks of rice and beans and also dried peaches and apples. Bacon was often hauled in large barrels packed in bran, so the hot sun wouldn’t melt the fat.

Hormel Foods Corporation (NYSE: HRL)

What better item could pioneers have used than canned food? If the Donner Party would have had access to Spam, things may have turned out differently... Hormel Foods Corporation produces and markets various meat and food products in the U.S. and internationally. It produces everything you could imagine.

And I bet that you have at least one of its products in your pantry…

Hormel has been consistently paying dividends for many years and has been raising them for 53 years, making this company another dividend king…

This company won’t make you rich overnight, but it will deliver you sure and steady income for years to come.

If you invested $10,000 in the company 20 years ago, you’d be sitting on $93,387 today. That’s an 833% increase.

If you panic and freeze up every time the market takes a dive, you’ll likely end up falling far short of your retirement goals. If you stick to the route, time your investments right, and don’t sit around idly when things seem scary, you’ll be just fine in the end.

The Donner Party was doomed by a lack of timing, forethought and execution. Had they been properly prepared and educated about their trip, many more would have made it out alive.

You can do the same with your portfolio during times of feast or famine.

I just released a new book called The Big Black Book of Income. It's 104 pages and chock full of companies like the ones mentioned above, and I want you to get your hands on it today – for free.

It's like getting airdropped crucial supplies in the midst of a snowstorm.

Don't wait until it's too late and you are forced to start eating your own. Protect your portfolio with tried-and-true dividend payers, ready to deliver you checks every month of the year.

You'll thank me when the snow starts to fall...

Godspeed,
jimmy-mengel-signature-fixed

Jimmy Mengel

follow basic @mengeled on Twitter

Jimmy is a managing editor for Outsider Club and the investment director of the personal finance advisory, The Crow's Nest, and cannabis stocks advisory, The Marijuana Manifesto. For more on Jimmy, check out his editor's page.

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