Which Stocks are Best for Beginner Traders to Get Into?
The best stocks for beginner traders to get into are; dividend stocks, large company shares, stocks of profitable companies, and Exchange-Traded Funds (EFTs).
Published April 21, 2021.
Stock markets take time to learn, but you don’t need superpowers to invest successfully. There are no fail-proof stocks, but some stocks are safer than others. All you need is some basic investing knowledge to get started.
Popular stocks for beginners
1. Dividend stocks - These are funds paid to stockholders out of a company’s profits. Most companies that offer dividends tend to be well-established blue-chip stocks with a long history of profits.
2. Large company shares - Large companies are safer bets than smaller companies because they have more stable leadership. They have also successfully weathered a few storms along the way.
3. Stocks of profitable companies - Profitability is a good sign. It means the company can handle a downturn since they have more cash at hand to handle market changes while they adjust. Also, publicly traded companies must report their financials so that you can study their profitability from this.
4. Exchange-Traded Funds (EFTs) - EFTs go up and down based on the performance of whichever index they are tied to. Investing in something that tracks with, say, the entire Dow Jones Industrial Average helps you mitigate risks you might otherwise take on by investing in individual companies that could have a bad year.
The bottom line
It’s critical to research widely and talk to financial experts if you’re not comfortable picking a suitable investment. Remember to diversify your portfolio, invest in an array of markets to mitigate unpredictable external forces.