Posted on 01 October 2012. Tags: safe stock investment
Amid the turmoil of the markets these days, many investors are simply looking for a safe stock investment. People with significant and diverse resources have almost completely withdrawn from the market because they do not like the looks of many stocks. If you are among the numerous investors with more modest resources who just want to save for retirement, that may not be an option.
Just keeping your money in a bank will actually lose money in the long run. Interest rates are near zero and inflation is devaluing your money faster than interest accumulates. What you need is a safe stock investment that will outpace inflation but not risk a major loss.
To find this safe stock investment, you need to observe a few qualities in the companies behind the stocks on the market. Read about their fundamentals and adhere zealously to two simple rules. Any company that can pass this simple test should merit your attention.
First, the company should have no debt. There are many companies that do have debt and will go on to become very successful. The problem is that it is hard to tell which company will do this. You do not need to take that risk. Play it safe and choose a company that does not have debt.
Secondly, the company should be earning more money every year. While plenty of successful companies experience bumps in the road as far as profits go, you do not need to waste time figuring out who will recover and who will not. The safe stock investment is always with the companies that just keep getting better and better.
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