This is the investment strategy that outperforms the market as a whole without examining a single financial ratio

It is common to turn to third parties or reviews to choose which movie, where to eat or which doctor to go to. If the recommendations carry so much weight in day-to-day matters, it seems logical to think that they can also serve to guide an investment. A strategy created by Fred Reichheld, author of The Ultimate Question 2.0, who, investing in the values ​​most appreciated by its clients, has managed to widely outperform the market as a whole.

To measure the level of loyalty of his customers, Reichheld created the Net Promoter Score. This tool measures the level of probability that a customer will recommend a product or service to a friend or acquaintance. Following the recommendations of its clients, Reichheld included in its first investment portfolio these 11 stocks: Amazon, Facebook, Apple, Costco, Alphabet, Southwest Airlines, American Express, JetBlue Airways, Verizon, T-Mobile, NortonLifeLock and Metro PCS Communications.

Although at first glance it may seem that some values ​​do not make any sense, the author of The Ultimate Question 2.0 secures in an article in MarketWatch that the recommendations of their clients got that your portfolio returns 2.8 times higher than the Vanguard ETF that replicates the market as a whole (Total Stock Market Index).

Reichheld also notes that the most recommended values ​​share a number of common characteristics.

The “Golden Rule” applies: It basically means that they do not seek profit at all costs if it means harming another company.

Greater involvement by employees: These companies give their front-line employees greater freedom in dealing with their customers. In this way, they create a bond of loyalty with employees and also with customers, who feel greater trust towards them.

Listen to customers: the opinions of consumers and their own employees allow these companies to improve and respond to current trends.

Customers come first: These companies seek to go beyond being able to sell their product, they also want to improve the lives of their customers. To do this, they work with the objective of offering an extraordinary experience that enriches their lives.