Best Stocks To Invest In
The right balance of investment products in a portfolio provides a degree of growth and security, but finding the best stocks to invest in with the current economy can often be confusing.
This is especially true with the turbulent numbers posted by many companies, which share values tend to follow; when business is good, stock prices typically rise, when it is not, prices fall.
Risk and Reward
In general, hanging on to the best stocks for a few years will allow the individual investor to come out ahead of inflation, and hopefully get a healthy return on their money. There are more conservative choices when preservation of capital is the goal, and riskier options for people looking to invest aggressively.
Examples of this are blue chip stocks and small caps. Blue chips are long standing companies with a history of paying steady dividends on earnings. They have deep roots in their particular industries, and as such, are looked at as more secure investments.
Small caps, short for ‘capitalization,’ are more volatile entities carrying greater risk for the investor. There is potential for exponential growth and reward, and the risk of substantial drops in share value.
A balanced portfolio can have some of both of these categories of stocks, the percentage of each depending on the level of risk the individual can absorb. Investors can also choose to hold a handful of high-performing companies in their portfolio, with the expectation that their growth will beat the market while assuming less risk.
Current Market Values
If one looks carefully, good values can be found. Despite unpredictable economic times, companies such as Apple, energy producers, and several commodities, are still posting consistent gains. Businesses serving everyday needs do well also, such as shoemaker Timberland (TBL,) who has developed a reputation for high quality, durable boots and shoes.
To stand out from similar companies feeling the slow growth of the current economy, Timberland can rely on their commitment to corporate social and environmental responsibility. Being a well-known producer of the best quality footwear keeps them safe from changing fashions.
Management is a good indicator of future stock performance also, and Timberland is led by experienced CEO’s with family ties to the business. A fact that may further boost investor confidence is their significant quarter ownership of the company. This is a well established company, and a good stock to hold for the long haul; and at prices still in the teens, it is a bargain.
For those with more capital at their disposal, Markel (MKL,) is a corporation focused on providing ever greater returns to their shareholders. With an annual compound rate of return of over 21% since 1986, it is no surprise the company has reached a price of $296 a share. Markel Ventures acquires small, profitable businesses managed by skilled teams, that can offer exceptional growth.
Choosing the best stocks to invest in requires the individual to thoroughly research key sectors of the market. While some may be looking for a small cap stock to surprise them with exponential returns, others look for well run companies with the potential to consistently increase earnings over the long term.
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