Investing in the stock market is one risky venture. While it can be a good way to grow wealth over time, putting money in it can easily lead to losses in the short-term thanks to the volatility of the market. This may be a deterrent for newbie investors who have a low-risk tolerance.
But this does not mean that investors shouldn’t risk betting on stocks altogether though. According to finance instructor Mary Fox Luquette, there are certain companies that a person can pick to minimize risk as they tend to retain their value in the long run. These are her specific recommendations.
Safer Bets
The American construction industry among the largest in the world employing a total of about 10 million people.
The University of Louisiana at Lafayette instructor particularly enumerated four industries investors can put their money into. First is the healthcare industry. Since getting sick and seeking cures is a fact of everyone’s life, companies operating in this space will have a stable market even during times of recession. Consider investing money in pharmaceuticals and biotechnology companies.
Another industry that will remain afloat during economic booms and recessions is construction. As Luquette pointed out, people and companies will always have a demand for construction materials and chemicals. Investors may know this need by experience as themselves might be planning to upgrade or build their own homes.
Investing in companies operating within the utilities industry is also recommended. The need for water, electricity, and gas is perhaps even more important than the previously mentioned ones given that they are among man’s most basic requirements to live comfortably. Safe to say, those providing these services to the millions of people who demand them won’t be going out of business anytime soon.
The need to stay in touch at all times is said to be essential in growing economies, which is a plus for companies in the sector.
Lastly, Luquette also encourages people to consider investing in businesses that provide information technology (IT) and communication services. The necessity for the products they offer would only become more and more apparent as the world progresses technology-wise. An investor may choose to buy individual stocks within the aforementioned sectors or shares of the industry itself through a mutual fund.
No Absolute Certainties
Investors are also still advised to keep an eye on how their stocks are doing.
While going this recommended route when investing may protect an individual from certain risks, it’s important to remember that investing itself can’t be totally risk-free. After all, no one is exempt from the negative effects of economic downturns.
There’s also the fact that even well-known corporations may suffer through poor management time and again leading to their shares losing some of their value. In the end, seeking guidance from a financial planner and keeping a diversified investment portfolio is still worth doing to protect one’s assets.