Types of stocks and the top ones to buy

Types of stocks and the top ones to buy

Everybody loves the idea of risk-free stocks, but there are none that are 100% safe. Even if you invest in the best companies, they can have unexpected troubles. The market has become very uncertain post-pandemic. Having said this, some investments are safer than others. If you feel that a company is in good financial shape compared to its competitors, you can consider it as a safe investment.

A few different types of safe stocks are mentioned below:

  • Growth stocks
    These stocks are shares in companies that generate positive cash flow, and it is expected that their earnings will grow at an above-average rate in the future. If you can identify some successful companies with strong growth prospects and calculate what you have to pay for their shares, you can earn some money.
  • Dividend stocks
    These stocks perform well in the bull market, and they provide partial downside protection for investors in bear markets. This is a great choice for income-seeking investors.
  • New issues
    Also known as initial public offerings, new issues are stocks that are offered for the first time in the market by a company.
  • Defensive stocks
    These stocks are the ones that don’t go down much because they are offered by companies that sell consumer staples. These stocks offer a constant dividend and stable earnings irrespective of the state of the share market.

Safe stock options
There is no direct answer to when someone asks you what is the safest investment in the stock market? Here are a few safe stocks that you can consider if you are looking for an investment. These safe long-term stocks can deliver strong results.

  • Berkshire Hathaway
    It owns a combination of six subsidiary businesses that include Duracell, GEICO, and BNSF. These are non-cyclical businesses that are expected to do well irrespective of the economic state. It can be said that if you own Berkshire, it is like you have invested in different companies by purchasing a single stock.
  • Procter & Gamble
    The company, commonly known as P&G, makes products that people need in any economic environment. The company is running a steady business for many years, hence it is the best in the entire stock market.
  • Vanguard High-Dividend Yield ETF
    It is an exchange-traded fund that invests in a portfolio of stocks that pays above-average dividends. Here the top holdings include JP Morgan Chase, Johnson & Johnson, BOA, Home Depot, etc.
  • The Walt Disney Company
    Other than its theme park and cartoon characters, Disney also owns a massive cruise line, movie studios, television network, etc. It has been observed that even after facing a tough time during the pandemic, the company’s share price stayed strong. Disney is a safe investment over the long term because of its presence and strength in the market.
  • Vanguard Real Estate Index Fund
    It invests in a diverse variety of real estate stocks that offer an above-average dividend yield. It is a low-risk and high potential investment opportunity for people. It offers excellent long-term growth without too much risk. It allows investors to get portfolio exposure to commercial properties.
  • Apple
    The company has an extremely loyal customer base and a great presence in the market. Buying stocks of this company can offer you a good return.

Conclusion
Your portfolio should contain relatively safe stocks so that you are assured that your money will offer you a return. In case safety is your priority, you should look for companies that increase their revenue steadily year after year. You can even look at the dividend of the company to understand if it is stable and has a strong history of increasing its payout. Last but not the least, you should consider the competitive advantage of the company in the industry. This will help you to find companies that are likely to expand their market share over the years.