The same is true with picking stocks. Investors can look at high growth companies that have no tangible business model. Perhaps the stock will triple in the next six months, or perhaps, it will fall by 75%. This is the like the old beater car; high-risk, high reward.
Instead, investors can look at quality growth stocks like Google (GOOG), Mastercard (MA - Get Report) or Starbucks (SBUX - Get Report), all of which have steady profit streams that continue to grow. This is our new car, essentially.
Dividend stocks can be looked at in the same light. Investors can look immediately for the stock that yields 9% -- and will likely have its dividend cut at some point -- or can instead, pick a consistent dividend payer like McDonald's (MCD - Get Report) or Coca-Cola (KO - Get Report), which have been paying distributions to shareholders for decades.
There are millions of places to turn when starting out and it's impossible to advise any large group on what exactly you should do or where to start.But whether you're old or young; new or experienced; looking for growth or blue-chips; using a manager or investing on your own; quality is always king. -- Written by Bret Kenwell in Petoskey, Mich. . At time of publication, the author was long SBUX, MA, MCD and KO. Follow @BretKenwell This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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