Which sector should I invest in during this recession period?
I want tο invest іn stocks bесаυѕе thіѕ іѕ a gοοd time tο bυу low аnd thе market wіll recover eventually. Mу qυеѕtіοn іѕ thіѕ: Whісh market/sector ѕhουld I invest іn? Thе following аrе whаt I hаνе heard аbουt frequently: 1) Medical equipment аnd supply companies, hοwеνеr, wіll thе prospect οf universal health care mаkе thіѕ a risky investment? 2) Discount stores such аѕ Wal-Mart, Dollar General, etc. 3) Finally, whісh sector wουld bе beneficial tο take advantage οf thе hυgе number οf baby boomers whο wіll bе retiring?
Thanks іn advance everybody.
first of all, don’t ever take advice from someone that tells you to invest in a specific company, as they usually have an ultimatum for doing so. usually they want people to invest so they can sell high and make money, not really caring about the value of your stocks at that point.
secondly, how much money are you investing? $50,000? $5,000? $500? consider the average annual return rate is truly 7%. if you’re going to invest $50,000, you’ll make $3,500 annually, but if it’s $500, you’ll make $35. investing is a great way to make money, but the only way you can do that is if you have money, so saving is paramount to investing and simultaneously having it be lucrative for you.
stocks are not a great first-time investor choice, rather, mutual funds are a good avenue. plenty of mutual funds perform just as good, if not better than many individual stocks, and the funds themselves are much less riskier, as they are a collection of multiple company’s stocks. i would highly suggest opening a brokerage account with fidelity or vanguard and previewing some of the recommended funds that come from them.
wal mart and mcdonalds are two companies that have had stock prices go up for a long time, and it’s because they are solid companies. however, you won’t see huge gains in their stock in a short period of time. so, keep that in mind. i read an article the other day that said if you are an investor at a young age, at least 35% of your holdings should go into foreign stocks. i have about 43% foreign stocks, 38% domestic, 10% bonds, and the rest in liquid money market accounts.
point i’m getting at is 1. don’t listen to other people about specific stocks, 2. invest in mutual funds if you don’t know what you’re doing, and 3. diversify. i don’t care if you have $5,000 and it’s all in a stock that went up 40% in 3 days, you will probably wind up losing that money if you don’t put those eggs in different baskets, even if that means putting it in a stock that has only returned 1% in the last 3 months.
hope this helps.