Are you among the 21% of people with less than $5000 saved for retirement?
There’s no time like the present to get started. And no better way to get started than by buying some stocks.
But what should you be buying? Here are a few stocks for beginners tips to help narrow down your search.
As you begin to do your research, look for stocks that are popular. This won’t always guarantee more money, but it is a good start.
Has everyone you know switched brands of phone, tv, blender, service center, etc? Safe to assume they make their customers happy.
Happy customers mean more customers. More customers mean a higher stock price for now. Think of Apple or Costco.
Keep in mind, people and trends change fast. What’s popular today might be worthless tomorrow.
Buy What You Know
Along with popular stocks, think about things you use all the time. Look at the stock of things you know and use.
Do you have companies you know a lot about already? Check out their stocks, too.
Otherwise, look at business plans of companies that interest you. Can you understand it? They might be a good buy.
You also want to look for companies with leading patents in their field. This isn’t the most stable way to invest, but, for some companies, it can be a good sign.
Old Stocks for Beginners
Many old companies have a very strong business model and revenue stream. Companies which survived the last two decades have seen plenty of hardships.
If they managed to survive all the recent downturns and disasters, they are a safe bet. By the same token, if they rose up during a recession, give them more than a single look.
Think of Berkshire Hathaway or Facebook.
Don’t make the mistake of believing an old company beats a new company every time. New companies rise as big competitors in their industry.
Also, a small company has the flexibility a big one can’t. As troubles arise, their mobility allows for a quick and inexpensive change in directions. Larger and older companies may have capital, but not flexibility.
Cannabis-based products and their companies are still new. But with a rise in the legality of their products and a wide customer base, they stand to keep growing in profits.
The Tortoise and The Hare
You might look at one company and see massive ups and downs over the last year or two. But then you see another company with smaller growth, but fewer bad years.
It can be tough to decide which. Sometimes a company with steady growth over a longer period of time is the better choice.
Does the other company seem like it’s near a bottom? Buy while it is low and be ready to sell it when it climbs. This depends largely on how much you want to risk.
What’s Best is Up to You
Very few people exist who can tell you what stocks for beginners are best. But these general tidbits will set you on the right path.
What you need for your portfolio will depend on your goals and your capital.
For more tips, get in touch with us here.