Since the inception of the Amsterdam Stock Exchange shortly after 1602, stock markets have become vital in the purchase and sale of securities. Today, there are more than 60 major stock exchanges internationally, 13 of which are in the United States.
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Millions of trades are made each day as stock brokers and regular folks try to buy low and sell high. For some, success leads to financial stability with a large reserve in the bank. Others, however, experience the shattering loss of a stock crash shortly after investing large sums of money.
The New York Stock Exchange (NYSE) is one of the largest and lists more than 2,200 companies. Knowing which stocks to purchase may be challenging for newcomers to trading, especially when looking for the best deal that will boast the most considerable ROI (return on investment).
To help you decide where to buy and what to avoid, we’ve compiled a list of the safest stocks to invest in, not just on the NYSE but on markets internationally.
Medical
Regardless of the region, medication is a requirement of almost every human at some point in their lives. From a headache that requires nothing more than a mild painkiller to those suffering from near-terminal diseases that need extensive treatment, the medical industry is vast and far-reaching.
Because of this, the value of the healthcare industry in the US has grown to more than $800 billion annually. This amount is made up of plenty of medical companies, some of which are private healthcare providers like hospital groups. Others are pharmaceutical companies on the cutting edge of developing the latest drugs and treatments.
With the almost constant demand for services and products in this sector, most stocks sold in this industry are safe to purchase and will likely see a profitable return. In instances when outbreaks occur (such as in 2020), these stocks could be worth more than almost any other.
That said, these stocks can carry some degree of risk. Investments in a company suddenly facing legal action due to the effects of a drug in its portfolio could cause stocks—and your investment—to crash. This sector also sees many IPOs, which could confuse those wondering whether to buy into an IPO or stock.
Energy
Like healthcare and pharmaceuticals, energy is ingrained in the daily lives of all citizens. The companies that supply this energy often have decades of experience in the industry and specialists who view and monitor not only the output they provide to customers but also the balance sheet to ensure costs are low and profits high.
In recent years, much debate has existed over the morality of these companies, many of which use natural resources to produce energy. This has caused a large shift toward renewable energy and even caused consumers to rethink where their energy is sourced. As such, demand for items like solar panels and inverters has spiked internationally, with the US seeing a 24% increase in solar installations.
Investment in companies that provide renewable energy supplies may not be the safest option, as once the demand has spiked, it will begin to normalize. However, investment in energy producers is still a safe option as these provide for millions of households and are unlikely to go anywhere in the foreseeable future.
Hedge Funds
Although a hedge fund is not a typical company that sells stocks, several hedge funds are listed on various exchanges. These operate like private options in that they pool investors’ money together to buy into other investment opportunities and generate a profitable return.
In most cases, hedge funds are offshore accounts or listed accounts that purchase stocks from international corporations. This helps reduce the risk of local currency fluctuations and means greater returns when foreign currencies strengthen.
While money invested in listed hedge funds is commonly safe, some risk factors should be considered. Among these are that hedge funds are run by people who may be more interested in their own return than that of investors. The other is that these funds aim to generate income by investing in other companies or stocks. As a result, the wrong investment could be costly.
Consumer Staples
Like energy and healthcare, some consumer items are considered staples of modern life. Among these are foodstuffs and toiletries, which are purchased by all income groups and are not reliant on a single demographic to make sales.
Investing in any manufacturing companies responsible for these items is generally a low-risk option. Because the demand for these items is always there, these companies are less likely to fold than others in other industries.
Alongside the manufacturing companies of consumer staples, many other industries are reliant on and, therefore, stabilized by these everyday items. Among these are logistic companies transporting these items and wholesalers who sell these to retail outlets. Each of these could be a valuable type of security to add to your portfolio.
Retail
Due to the explosive growth of e-commerce in recent years, many believe that retail is a dying industry that will ultimately be replaced with screens and servers. However, consumers’ strong desire to touch and inspect items prior to purchase remains. This, alongside the desire to purchase something and have access to it immediately, means retail is still a stable sector.
With a vast array of investment opportunities in this sector, retail investing can quickly become profitable. This is particularly true if one of your investments is expanding and opening new stores, is a popular location for consumer staple purchases, or is launching a dedicated e-commerce platform.
However, investing in retail comes with certain risk factors. Chief among these are the progression of e-commerce among consumers and the rising overhead costs of running a retail outlet.
Conclusions
Investment is a tricky subject regardless of the amount you’re looking to invest. From those who think that claiming bonuses with zero wagering requirements on games from online casinos is a sound investment to those who scrutinize years of financials, investment is a personal decision.
Whichever side of the spectrum you fall on, the sectors or types of stocks listed above are known for their ability to weather storms. So, if you’re looking to invest in the stock market, choosing from the industries above may be your best bet for a solid return.
I am a writer based in London, specialising in finance, trading, investment, and forex. Aside from the articles and content I write for IntelligentHQ, I also write for euroinvestor.com, and I have also written educational trading and investment guides for various websites including tradingquarter.com. Before specialising in finance, I worked as a writer for various digital marketing firms, specialising in online SEO-friendly content. I grew up in Aberdeen, Scotland, and I have an MA in English Literature from the University of Glasgow and I am a lead musician in a band. You can find me on twitter @pmilne100.
