It is never easy to pull the trigger on new stock purchases. There is always the risk of losing money in the stock market, but you have to be willing to take risks if you want to make money investing, the key is to try to minimize your risks as much as possible.
The only way to completely erase risk from your investing approach is to avoid stocks and focus solely on fixed income investing, but with interest rates near historic lows, the income that fixed income assets provide is very low, which in itself is a risk since you could be making more money investing in the stock market.
Investing is not an easy game, but in order to put your money to work, and still get a good night’s sleep, you have to do you homework, and you have to seek out the stocks with the highest likelihood of producing positive returns.
There are a couple different things I look at when deciding whether or not to invest in a particular stock. First I look at the stock’s short and long-term trends. If the trend looks good, then you want to double check that the stock is still attractively priced, and has not risen into overbought territory.
I also want to make sure that the company has a decent earnings track record, and that earnings are expected to grow moving forward.
The final piece is to screen the stocks that pass all of the above tests and look at the dividend yields. Dividends are an important piece to any stock portfolio, and I like to find stocks that not only are solid dividend payers, but are also growing their dividends, so the income the stocks provide continues to rise moving forward.
The following five stocks pass all of the above criteria, and investors should consider buying shares with both hands.