Stocks can be brutal.
You have 6,000+ ways to lose money on the stock market.
Knowing which stocks are safe to invest is not easy.
Because most of us don’t know how to find safe stocks.
And if we are looking for that one hot stock that will change our life.
We need to stop chasing that dream.
Because it’s not happening.
Even if our cousin or uncle or best friend did it.
In reality, they were lucky.
That’s all.
Instead we should do this:
invest in stocks with a theme
Because it’s easier to invest in investment themes we can understand, than buying a simple stock with a lot of particulars we do not understand.
And it will be a lot safer.
Not 100% safe, because nothing is on the stock market.
And some investment themes can also be very risky.
Like gaming and metaverse. We shouldn’t invest in them.
Instead style investing is a lot safer.
In particular the US MidCap Value investment style, my favorite.
But it’s not the only investment style.
We have also these: US LargeCap Value, US SmallCap Value, US MidCap Growth, US LargeCap Growth and US SmallCap Growth.
Style investing is buying group of stocks by market size: Big size, Mid size, or Small size.
And their valuation level: Value (cheap) vs Growth (expensive).
Just like buying a car.
Big and expensive car, vs small and good value car.
That’s the only real question you need to ask yourself when investing in stocks.
Because just like that.
You will know which stocks to buy.
There are still a few more things to know about each investment style.
SmallCap stocks are viewed as more risky in terms of price volatility than LargeCap or MidCap stocks.
Growth is a measure of success, while Value is a measure of neglect.
What this means is you are buying stocks on how they are perceived by the market.
Where stocks in each investment style tend to move in sync.
Making them more predictable in terms of volatility.
And technically safer because you know which volatility to follow.
And that’s priceless.
If you want to invest in stocks, we have a curated list of investment style ETFs you can follow. Start here and we will send them to you.