The major difficulty in the stock market, especially when you are new to the industry, is working on a hunch or a tip from an untrustworthy source. But like so many areas in life, following the advice of anyone who tells you, “you can make fast, easy money” is easy to do. Making money is why you got into stocks and the promise that by doing one thing or another, you can make more is enticing. The number one stock tip anybody will ever give you is: be wary.
Showing discernment when it comes to buying and trading securities is the best way to make money and not to lose it. All it takes to find yourself in major trouble is to accept one bad tip and subsequently invest too much into that tip. If you are new to the markets it is smart to begin investing in commodities, bonds and blue chip stocks that have established reputations in the industry.
Finding blue chip stocks can be tricky in and of itself. A few of the well recognized blue chippers are McDonald’s, Microsoft, Apple, Starbucks and Citi Group. All of these companies have consistent profits and stable revenues and have proved to be a lasting presence in the business world.
A common mistake is to believe that all blue chip stocks will continue to rise. That is simply not true, and in our economy, believing it will not happen is absurd. Many of the most trusted stocks in the industry have been dropping in today’s uncertain market. However, they will perform in the long run and that is what makes them a good company to own.
Then again, if you do feel more comfortable with the stock market you can be a little more risky with the hope that your research will pay off in a big way. After all, Warren Buffet, who makes a living in the market (and a good one at that) says, “Trade what you know.”