There are 9 different types of stocks that investing beginners need to keep in mind so that you can create an investment strategy that is suitable to your needs, risk tolerance, and personal financial goals. Some of these different types of stocks to invest in can fall into a larger category. But I think it’s important for beginners to learn to invest in the stock market by knowing exactly what type of stocks you’re getting yourself into so that you can have the right expectation and the right financial plan. When I first started investing I simply thought I can buy a stock and wait 20 years for it to grow and then get out. It turns out, there are much better ways to maximize long-term investing. On the flip side, many traders get in and out of stocks on a daily basis to gain small income profits. By now you probably know that I’m against day trading for people who’s main job title doesn’t say “professional trader”… and if that’s what you want to become, then you’re in the wrong place. But if you’re looking to grow your money over a longer period of time, and make your money work for you (not the other way around) then you’re in the right place.
Predictable earnings and dividends, steady growth, high-quality stocks.
Have long and sustained records of paying higher-than-average dividends, relatively safe, but low growth.
Experience higher than average earnings and sales growth, pay little to no dividends, and most return from capital appreciation.
Some of the hottest stocks in 2018 and onward. Represent the technology industry and includes companies in the field of Artificial Intelligence, Big Data, semiconductors, and software. It can be blue-chip or speculative.
High PE’s, little to no earnings, high risk, but offer the potential for substantial price appreciation.
Move with the business cycle. Earnings and overall market performance are closely linked to the general state of the economy
Tend to hold their own, and even do well, when the economy starts to falter. Defensive stocks are countercyclical.
The market value of less than £1 billion, and may offer above-average returns.
Medium-sized stocks, generally with a market value range of £1 billion to £4-5 billion.
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