Do Your Research

• Do not invest money into a company's stock unless you are completely familiar with the company and its business. You can find stock tips in any trading newspaper or on trading websites, but do not act on any tip until you have researched the company and found out if the tip makes sense. Reading a stock trading tip in a publication you trust or an email does not make it an instant winning idea. Research the company to find out if the rumors the tip is based on are true. Analyze the information that has spawned the tip and look to see if there is really profit potential in it. If you feel confident after research that the tip is valid, then proceed with your buy. If your research cannot confirm the tip, or what you find does not match up with the tip, then you may want to avoid that investment.
  
  

Don't Shy Away from Large Companies

• The stocks in larger companies can gain in value in the same way the stocks of up-and-coming companies are able to gain. Larger companies are more inclined to be involved in high-end research and development that could bring great value to their stock offering. A good way to start investing is to consider investing in the large companies you already patronize. If you prefer one soft drink over another, then consider investing in that soft drink company. Larger companies can offer stock splits and dividend payments that could far exceed the value of any offering from a smaller company. Do not always look at large companies as blue chip stocks with minimal income performance. There can be tremendous upside.
  
  

Focus on Consumer Staples

• Even in a bad economy, people still need to buy groceries, get health care and drive to work. That is why it is a good idea to invest some of your stock money into companies that deal in industries that people need even in the worst economies. In investing, nothing is safe from risk, but if you put a portion of your money into an industry that supplies a product or service that people need to survive, then you decrease your potential for loss in those investments.