I think the best stocks, and not just for beginners, are in businesses you understand. Do you understand how they make their profits, how they use their profits, how their profits will translate into a return on your investment? Do you know how economic and seasonal cycles affect the business? Does the company have a decent "moat"? Do you trust the company's management? Are the "insiders" currently buying or selling? Remember you are not just buying shares. You are buying a small parcel of ownership in a business. Sorry, to sound "preachy", but I see too many people losing money as they follow 'Mr Market' and trade shares, instead of building wealth through accumulating quality assets.
What happened with China Northeast Petroleum? I had a buddy who had put some money in there, so I'm a little bit concerned. And would you personally only keep it at five percent or would you ever make exceptions?
I agree with the first statement, but I think people need to understand there is a difference between hobby investments and investments in things you understand. The music industry is a big example of why you should not invest in hobby industries.
J&J was one of the first 5 stocks I bought.. 30 years ago!! I agree it is a great first stock because it has a huge range of products, pays a dividend, so you can learn how that works.. and is just a safe company and you will be able to learn some fundamentals without having to worry about emotions right away. Proctor and Gamble is similar. A lot of people seem to be recommending tech stocks.. and they can be great stocks, but not right for a new investor just because of the swings in share price, which a new investor might not understand and will emotional-sell the stock. I think it is better to understand the process before you have to deal with dealing with price swings.
Damn I wish I had bought JNJ 30 years ago. But I wasn't even alive back then! Certainly a good investment for you, are you still holding the shares you bought back then? And yes PG is kinda similar and I do own them too. Really looking forward to seeing what their restructuring efforts will bring.. I quite like the idea of selling brands that don't really increase profits and using the money to pay down debt.. could be a great move. But it does need to work out as the EPS and div. growth has really slowed down for PG.
Beginning to invest and wanting to earn something more than your local banks offer in interest? Everyone has a cell phone no matter how the economy goes: VZ (or T) pays > 4% dividends and cash flow is decent. The internet of things needs traffic switches: CSCO. Let dividends reinvest. Want something riskier? I like accumulating TWTR at current levels $36-37 looking for a return to ~$50. Despite all the chat noise and agitators to remove current management, this messaging system is the first go-to mobile resource used for breaking news worldwide. FWIW, I think the overall consumer economy stinks. Government-reported employment numbers are phoney, not considering the underemployed and the increasing number of persons giving up looking for work. I personally stay away from consumer stocks (e.g., big box and department stores). Banks have under attack for years, and the prices just crab sideways in a range with minuscule dividends. And I think we've passed a bottom in oil prices in March or so, so I am considering some oil stocks; WW3 starting in the Middle East could change everything. YMMV.
As a beginner, always look for value. Growth stocks and volatile stocks can come with great risk, but safe stock that have a nice study growth in a stable industry over a very long term are great. Better if they pay dividends.
If you want to invest in Telecommunications, I'm seeing a lot of interesting things about Sprint and T-mobile. Sprint's been expanding their network rapidly to compete with AT&T and Verizon, and T-mobile has been doing a lot of work cutting the legs out from underneath prepaid carriers like Straight Talk and Net-10. T-Mobile piggybacks off the Sprint network in most areas, and would probably be cheaper to get into - and sticking with them as they expand with Sprint might end up paying out a lot in the long run.
I made some money swing trading on Sprint a few months ago, but took my profits and moved on with the price stagnation. Until this regime is out of office and the FCC returns to sanity, there will be no merger between S and TMUS. Son is losing money in South Korea and has essentially not willing to sink more capital into S, not to mention the silly store sharing agreement with the RSH ghost. TMUS muddles along, but doesn't impress me. I view VZ (or T) as a safe source to park cash and get some interest (dividends) without having to worry about it Not exciting, but much better than parking all your money in a bank savings account or CD. Works for me, YMMV.
I have both T and BCE in my portfolio for that very reason. The governments do love to dip their toes into telecom business by messing around with the spectrum auctions, regulations etc. So that is definitely a worry in my opinion. But other than that the companies are generating good income so these larger telecoms are a pretty safe bet with a decent dividend income.
