February 23, 2018

What stock to buy?

Michael Stadler from Osteopathy Central has an important question before he begins his journey into the world of stock investing: Which stocks should he buy? Luckily for him, this is not a tough question. When choosing stocks, you can simply use the role of a dice. This is exactly what the incredibly popular index funds are doing. It, therefore, doesn’t matter which stocks you buy. Think about which companies you like, because the returns, in the long run, depend on managers who don’t even work at the companies yet. In general, you should prefer large and well-known companies and you shouldn’t focus only on one specific industry. For instance, you could research the number of companies in your country in health, real estate, manufacturing, etc., completely independent of the listing on the stock exchange. Your goal could then be to mirror this distribution in your portfolio. Your own preferences are therefore a criterion when choosing stocks.

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