For the new investor, making a decision about where to invest is a difficult decision at best. Of course, for those who have done their homework before making the plunge, it’s less risky and more titillating with their discovery. This business is very volatile, and as such, it’s more important than in any other investment market to know a great deal about the financial position of the company whose stock you are considering. The more stable the financial position, the more likely it is that their stock will rise and fall more evenly than that of companies who are facing financial difficulties and have shown the public that their finances are not usually in the best of shape.
For those who are concerned about risk, one of the places you can always count on stock to remain high in price is the utilities. After all, people always need electric, gas, water, and telephone. Of course, cable services tend to remain high as well, especially in today’s world of digital cable and high-speed internet service. The petroleum industry is one of the most volatile industries of all, with prices changing frequently throughout the day, let alone on a weekly basis. This particular market, though staying someone high priced, is more a market for the fundamental trader than the swing trader because of the quick turnaround of prices, especially over the price couple of years when gasoline prices have remained between $2-3 a gallon, and rise and fall rapidly.
Many new investors find the stock market risky business, and for the most part, that is true. However, investing in any market is risky business, including money market accounts and CDs since the interest rates can rise and fall at the discretion of the financial institution. The key is to conduct as much research as possible before you make the initial investment and know as much as possible about the financial position of the company in which you invest. Once you make the investment, continue to follow the trends of the company you chose so that you will know immediately if any trends in the market exist that may cause a plunge in the price of the stock. Following the trends will allow you to trade your stock when it is at a price high enough for you to make a profit and before any downward trends affect the price substantially.