The best way to build wealth is to find stocks that are stable, and have the potential to provide steady gains over the long-term. If you can pinpoint these stocks, and also make sure that the companies have a solid capital plan, you put yourself in a great position to build wealth over time.
Some investors prefer to look for stocks that have the potential to produce huge gains over a short period of time. While there is nothing wrong with this approach, it is definitely not for everyone. Quick gains are always possible to find, but you have to accept the higher risk involved with investing in such stocks.
Higher risk/reward type of investing can be very rewarding when things go right, but it can also wipe out a lot of wealth when things going wrong, since you have to assume larger downside risk in order to seek the quick gains.
For our discussion, we are going to take the “slow and steady” approach to winning the race, and look for companies that are not only leaders in their respective sectors, but have a proven track record of producing nice gains for their shareholders, have attractive valuations and expected earnings growth, and have a good capital program.
Adding dividends to our list of requirements allows you to purchase stocks, have their dividends reinvested, and gradually build your position in the stocks through the reinvested dividends.
Let’s take a look at five steady stocks that you can use to start building wealth today.