If The House Always Wins, Buy The House! (IG Group Holdings Plc, ICAP Plc & Hargreaves Lansdown Plc)

I was thinking this morning of my own previous failures when it comes to investing and this took me back to the time that I spent in equity research sales a small number of years ago. One very particular memory sprung to mind more so than others.  

During both good and bad times, we investors can frequently find ourselves lamenting the markets for personal mistakes or misfortunes, while some often even resign themselves to the belief that it is only the brokers and bankers who ever really win.

This conjured more thoughts of not just an old adage about ‘the house’ and ‘winning’ but also an existing share position of mine, as well as the potential for today’s market environment to support the creation of a new adage… if the house always wins, then buy the house!

Buy the house with IG shares!

IG Group (LSE: IGG) shares offer investors a way to make both the bankers and the brokers work for them. The derivatives dealer benefits equally from market volatility as it does from clear and definable trends.

Whether equity markets rise or fall, so long as IG clients have a view on which direction financial asset prices are likely to move in, the group will be in with a good shot at making itself — and you — money.

With IG shares in the midst of a pullback from July’s highs, while both interest rates and economic catastrophe remain on the table as issues for investors, I am more than happy to consider IG for a place in my own portfolio.

Double down with Hargreaves Lansdown!

For those looking to double down on the idea of buying the house, Hargreaves Lansdown (LSE: HL) is another one to consider. Whether clients buy, sell or sit there and do nothing, Hargreaves Lansdown’s fee structure means that it will still earn itself (and you) money.

In addition to being the UK’s leading fund supermarket, HL also offers a top flight range of additional online services, while scope still exists for it to branch out into other areas during the years ahead.

However, before jumping into these shares head first, investors would do well to be mindful of the risks surrounding the group’s dividend. Its commitment to a ‘progressive dividend’ has seen HL paying out almost all of its earnings as cash returns to shareholders in recent periods.

This means that if the dividend is to avoid a period of stagnation — or even worse, a cut in the future — management will need to ensure that earnings continue to grow year after year. Even one failure in this regard could lead to damaging speculation about the future of the payout.

Clean up with ICAP!

For those investors who would like to clean up on the idea of buying the house, ICAP (LSE: IAP) shares would be the ones to really look at. The group is the broker’s broker, with a particular focus on fixed income and fx, which are both areas that could see considerable volatility if US and UK rates rise in the near future.

In addition to being highly geared toward any increase in trading activity or volatility, ICAP also has a healthy and growing business in what it calls ‘post-trade risk and information services’, which is an area that is likely to grow further still with the ever-advancing march of regulation when it comes to trading risk.

Furthermore, the shares have fallen by 25% since May following a weak start to the year in terms of trading volumes. If we assume that the Fed takes a chance by raising rates in December and that the BOE does the same shortly before or after, then ICAP shares may not be this cheap again for quite some time to come!

If you are not looking for another mortgage, but would still like to protect or grow your wealth through the next boom-bust cycle and beyond, then perhaps you would like to consider some of the companies featured in our analyst team’s special report titled: The Fool’s Five Shares to Retire On.

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James Skinner owns shares in ICAP. The Motley Fool UK has recommended Hargreaves Lansdown. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.