How to Invest in Safe Stocks

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Safe stocks for investments include companies that are steadily successful, such as electric companies, phone companies, water treatment companies and food companies. Invest in stocks that will stay afloat, even through times of a low economy, with information from a portfolio manager in this free video on investing.

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Video Transcript

Once every ten years, in all likelihood, the U.S. stock market is going to go in half, and you could buy the highest quality names that you could think of, but when that happens, the value of your holdings are likely to go down as well as the overall market. Hi, I'm Roger Groh with Groh Asset Management. Today we're here to talk about safe stocks. Well, my point in talking about market volatility is there really are no safe stocks because when prices go down, most prices will go down with it and you have to be able to handle that volatility. On the other hand, despite the fact that that share prices are volatile, if the core earnings of a business are consistent, and they always sell more units of whatever it is that they make, and as a result, drive cash flow, then that is as close to safe as you're going to get. But it's going to be in earnings safety. Not necessarily in share price safety because there is no such a thing. Now what types of businesses are like that? Well, what things do you use everyday? Even when things are tough, you're probably going to pay your electric bill, you're probably going to pay your cell phone bill, you're probably going to drink water, you're going to continue to pay your cable bill, you're going to have food on your table, and you're going to buy gasoline for your car. Those are examples of businesses where the demand is likely to go up even when things get tough. I hope that helps. I'm Roger Groh. Thank you for spending a few minutes with me.

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