With the markets trading near record highs, investors are starting to think about preserving some of their recent gains.
One way to accomplish this would be to liquidate all your holdings and sit on cash for a while. This accomplishes the goal of preventing any market losses, but is this is the wisest move? Absolutely not! The market is strong enough that you want to keep your money working, but you should make sure your money is working in the right places.
The idea of a “safe” investment in the stock market is just an illusion. There are no guarantees when it comes to the market, as just one piece of negative news could literally sink even the strongest and most steadfast securities.
Investing is about risk. There is no denying that, but while you have to be wiling to assume some level of risk, there are ways to limit the risk you assume. One way to limit your risk is by investing in solid large cap stocks.
It takes a strong company to rise in the ranks to the large-cap stock universe. Companies that have managed to grow in size to market caps in excess of $10 billion have proven an ability to lead and to adapt to changing market conditions.
Their size also provides a level of stability that smaller companies do not enjoy.
If you are concerned that a market sell could be in the making, consider setting up positions in the following large cap stocks to build a little safety in your portfolio.