Safe Stocks: A Guide on How to Choose Good Investments

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Are you interested in getting started with the stock market?

Nobody ever really knows what will happen in the stock market. Analysts can predict which companies are safe bets or which ones may pose riskier investments. But they can never predict the future.

Your best bet to grow your wealth in the stock market is to put it in safe stocks. A good investment isn't one that immediately pays out thousands of dollars. It's one that reliably returns a small amount of money year after year.

And while you should be wary of stocks that pose large amounts of risk, they can also spice up your portfolio. Riskier stocks lead to larger rewards if they pay off. Investing in a few, but not relying on them, can be the difference between a positive and negative portfolio.

At the end of the day, investing is a balancing act. Getting started can be hard. Good investing comes from knowing which stocks to choose. Keep reading to see which are right for you.

Blue Chip Stocks are Safe Stocks

You've probably heard the term 'Blue-Chip stock' before. These are stocks which have been around for many years. They've proven they're financially stable.

Their stock reports boast stable growth and recoveries from hard times. They're often household names. The Starbucks stock report shows that the company is one such stock.

They experienced a decline in the value of the stock in July 2018. But they quickly recovered and are doing as good as ever now. That shows that the company knows how to get back on its feet.

It'll be a secure place to put your money. And while it may not be skyrocketing in value, Starbucks is a household name. People like their coffee, and so Starbucks will always have revenue.

Medium Sized Stocks Can See Massive Growth

However, stocks like Starbucks can be expensive for some people. It currently trades at around 57 dollars per stocks. Yet, stocks like Alphabet Inc. trades at over 1,000 dollars. New investors may be intimidated by such high numbers.

That makes medium-sized stocks a boon for people. These are relatively well-known companies at least within their industry. They share some of the stability of expensive blue-chip stocks but also have room to grow.

AMD, a company that makes computer processors and graphics cards, experienced such growth. It went from around 12 dollars to trading at 30 dollars in around a year.

And since AMD is well-known in its industry, the entire industry would have to tank for investors to be in danger. That makes it an affordable, and safe bet.

Cheaper Stocks for Aggressive Portfolios

However, portfolios should also feature some aggressive stocks. These stocks usually trade at around 2 or 3 dollars and have a lot of room to grow.

Even though they may grow, they may also tank. These aren't established companies and can go bankrupt at any moment. But at the same time, they can make it big. And if you get in on the ground floor, you'll see returns beyond what safe stocks could get you.

Since they're cheap, you should buy a few to spice up your portfolio. Just don't rely on them.

Watch the Market, and Then Strike

The best thing you can do when investing is to watch the market. The old adage, "buy low and sell high," is true. It will always grow, and if you invested in safe stocks you don't need to worry about downturns.

If you don't have money invested yet, watch the market. Wait for some companies to spend a few days in the red. Then, invest, and you'll see immediate gains.

Just make sure they're safe stocks. And if you're still worried about your finances, you can always read more on our site.

 

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