Just recently I discovered a few things:
Warren Buffet always recommended people invest in something that they WILL NOT lose money in. Basically, stocks that WILL increase.
How do you know which stocks WILL increase? How did Buffet KNOW? He knew because he knew the board of directors and the CEOs of the companies he invested in. How did he do that? He did not have the net back then, and even if he did he would likely NEVER know what their business practices consisted of. He KNEW because he had a friendship/business relationship with these folks. How did he do that? He knew Benjamin Graham......he had inside scoops. It is nearly IMPOSSIBLE for most of us to be in the loop on these things like Buffet had the chance to be.
OK, what is the next option? Blue chip stocks. DOW 30. But even these are not always winners. Microsoft and Walmart may be on their way down, for example. It is really hard to know with blue chips and they are not always safe.
Next option- a stock with high dividends. These also are not fool proof, as stated in my previous post. Do not rely on this either.
Last option- diversify. I don't mean buy one company stock in one sector and another from another sector. Company stocks are outdated and not worth it IMO.Mutual funds, ETFs, index funds. These are the common joe blow's best option. Get a mix of world stocks, small caps, mid caps, large caps, S&P index, DOW index, ect....
This is my opinion and others may disagree. I know a guy who buys penny stocks and makes thousands. Good for you, but the stakes are too high for me. He has also lost thousands.....
I have lost my arse too many times on individual company stocks. No more for me. I have gained about 3 times as much as I ever have with ETFs in one year than all of my individual company stocks combined since I started investing.....