Worse types of stocks or comapnies to investment in?

As far as what to avoid, I would recommend staying away from commodities. There is no rhyme or reason to the commodities market, and it is much more akin to gambling than investing. Some very experienced investors can do well with commodities, but for the newbie, or someone with moderate experience I would say stay away. In regards to start-ups, I would not touch IPO's anymore. They are set up to help the insiders make significant profits from the initial run-up when the IPO goes on the market. If you want to get in, wait till after the run-up and subsequent drop. Finally, an investment that looks risky, but has played out very well for me in the past is in Business Development Companies. They have to pay out 90% of their income in dividends, which can get you a double digit yield. Just make sure to use your due diligence to pick one with decent fundamentals, and pay attention to what the fed is doing with interest rates.

 

Yeahhh, penny stocks are dangerous. The company could disappear overnight and you would be left with nothing. I'd avoid a company like Whole Foods because their competitors are starting to catch up, and they don't come with the extreme price or arrogance. (Full disclosure: I used to work for them, and let's just say these stories about false weights and 'asparagus water' do not surprise me in the least). They had some underhanded tactics in the way they ran things (improper tares, diluting marinades, etc.) They are not an ethical company, imo.

 

Also, companies that do not actually 'make' anything physical are probably going to be more prone to fluctuation. A mining company basically knows how much it will be mining, and when the economy slows down you will have more time to evaluate options. Companies like Facebook, Twitter, etc. are still searching for ways to make solid profits. That isn't surprising to me. They just have a lot of people, but no real way to get you to spend your money. They aren't essential.

 

There are some no go zones as far as stock investing is concerned. One of my red flags is stocks that are currently riding high. A crash would be catastrophic for an investor. I also consider mutual funds that have high expense ratios and high turnover to be a risky investment decision since they erode profits. One of the worst investment decisions one can ever make is overly complicated investments like options. But in reality, it all boils down to the strategy one is using. The worst strategy is 5 minute investing strategy.

 

The best stocks and companies to invest in are the ones that you are absolutely certain will work in your favor. Trying to do it for money and money alone will lead you to guesswork, because so many people already want that. You want to trace certainty, not money.

 

A trader should avoid investing in small companies at the intial level of trading. Small companies generally have less
managed team and they have lack of capacity to recover the loss. If an investor wants a better return in the market then he must go for large companies as they are well established and they have a highly manageable team to cover up the future loss. An investor should select buying stock in a reputed company as they historically provide the best return on investment.

stock tips

 

Hello, The performance data for the financial sector has not been back-adjusted to remove the real estate companies.
Thank you