Are There Safe Stocks For Beginners?
Finding safe stocks for beginners is not easy and requires intensive exposure to the stock market. The following stock tips can still be helpful for you to discover safe securities for beginners:
company with one low debt and high or continuously increasing profits, dividends and investments should be shortlisted as an investor. Also increasing sales are an important criterion when selecting safe stocks. Because the basis for higher profits in the future is a growing business. Company size can also play a crucial role in whether a stock is crisis-proof. The Lower limit of annual turnover should be at least one billion euros.
In order to minimize political risks, when selecting stocks you should focus primarily on companies that come from developed industrialized countries with stable market and democratic structures. For example, some stocks from China, Russia or emerging markets have promised big growth in the past. However, both the corona pandemic and the war in Ukraine made it clear that such individual stocks entail high risks for investors. In particular, newcomers to the stock market should not expose their capital to such a risk. Funds or ETFs offer better diversification and security for your portfolio.
Tip: The price-earnings ratio (P/E for short) can also give you an indication of whether a stock is overvalued. However, the P/E ratios can be extremely different in different market phases and sectors. The situation of the company also plays a role. A low P/E could also be a red flag because the stock price has already plummeted in anticipation of falling earnings. So take a closer look and compare before you buy supposedly safe stocks.