Types of Stocks and Which Ones to Buy
There are thousands of stocks out there so first you need to decide which type of stock you want and then find the good ones in that group. I will describe each type and some of the ones I have invested in or believe have great potential.
Regular stock: Any stock from a public company traded in the NYSE, Nasdaq, or any stock exchange. When investing in regular stocks I mainly look for companies that have a lot of growth opportunities so I can double my money soon. Companies like Facebook, Zoom and Beyond Meat are leading in their respective categories and will continue to be in demand in any type of economy. Even during this economic recession the prices of these stocks are actually going up while most other stocks are going down.
Dividend Stock: Similar to a regular stock but this time the company will pay you a dividend usually every 3 months. Microsoft and Apple for example are dividend stocks that deposit money into your account every 3 months and you do not have to do anything. The dividend yield varies depending on the company or fund you invest in.
Some stocks pay you a monthly dividend! This is definitely a great way to get free money. You always want to look for companies that have been paying their dividend for a long time and actually increasing the dividend. Companies like Apple, Microsoft, Walgreens, Walmart and AT&T are great examples. If you want to keep updated on the best dividend stocks I would recommend to subscribe to the Sure Dividend newsletter. I read it every day and it actually has great insights for free.
ETF: Exchange-Traded Fund. Instead of investing on a stock you are investing in a large group of stocks. There are funds that invest in stocks that usually follow an index, so basically when you buy that fund you are investing in lots of stocks at once. Awesome right?
The most popular index is the S&P 500. This includes the 500 largest US companies. You can buy a fund that invests in the S&P 500.
So when you buy the stock VOO or SPY you are basically investing in the 500 largest US companies. You are investing in the whole US economy. Funds are considered safer than single stocks but for the same reason they usually do not grow as quickly as single stocks. There are funds for specific industries and markets, so you can invest in a fund just for tech stocks or financial stocks. Another great point is that funds usually pay dividends as well! Some of my favorite ETFs are VOO, SPY, VIG and UTG.
REITs: Real Estate Investment Trusts. These are funds that invest in Real Estate in different ways. Some funds invest in apartment buildings, others in shopping malls, others in warehouses, etc. The great thing about REITs is that Real Estate is essential and that most of them pay good monthly dividends!
REITs are required to pay at least 90% of their earnings in dividends so that is why they are usually a great investment if you want to get high yield monthly dividends. One of them is actually considered the monthly dividend company because it has been paying the dividend for 598 consecutive months and increases the dividend frequently as well! It is called Realty Income and the stock symbol is O. Another great REIT is STAG.
Most experienced investors advice investing in ETFs since you are not betting in just one company and instead in lots of companies so even if one goes bankrupt the other ones will still be there making money. I personally like ETFs, dividend stocks and REITs. I believe dividends, especially monthly ones, are very powerful to take advantage of the compounding effect if re-invested. If you invest long term on great dividend stocks then you can basically get free money every month!
If you are in the US you can also get started with free stocks! These are completely free stocks that brokerage accounts give you so you have nothing to lose, no excuses. Here are the links.
Robinhood, which is one of the most popular platforms right now. Just sign up and get a free stock
Webull, which is also becoming very popular and has great tools to analyze stocks. Get a free stock when you sign up, then another free stock when you deposit 100 dollars. You can withdraw the 100 dollars later if you do not want to invest them, so 2 free stocks!
In recap these are some great stocks to buy: Microsoft, Apple, Facebook, Zoom, Beyond Meat, AT&T, Walmart, Walgreens, VOO, SPY, VIG, UTG, O and STAG.
As always do not consider this as direct advice but do your own research. First decide what type of stocks you want, then Google which have been and will continue to be the best long term. Think about investments that will survive any type of economic recession. Once you have an idea of some, analyze them for a couple days and start investing, start taking action!