Invest in common stocks


  1. Diversify adequately but not excessively.
    Invest in 10-30 different stocks to reduce the risk.
  2. Select large companies.
    Opt for companies that are conservatively financed and that have a long record of continuous dividend payments.
  3. Use the dollar-cost averaging technique.
    Once you’ve chosen the companies to invest in, determine a fixed amount of money you want to invest every month. Then, maximize it by buying as many stocks as possible.
  4. Set a price limit for yourself.
    Impose a limit on the price you’ll pay for the stock. Start with a share price limit of 25 times the average earnings over the past seven years.
  5. Get advice from your broker once a year.
    Let an investment counselor look at your portfolio and determine if the quality of your investments can be improved.


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