When it comes to investing your hard-earned money for additional income, many options like real estate, gold, and stocks are open to you. Many consider investing in real estate and gold safe options as these seem real, basic, immemorial and therefore low-risk. Stocks, on the other hand, are esoteric, non-essential and risky.
Furthermore, stock investing suffers from the “airplane effect.” The average person believes traveling by air is more dangerous than traveling by car. In reality, air travel is much safer. However, when an airplane crashes it makes the evening news, and it is reported in full detail. Car accidents are somewhat routine occurrences, and they almost never get reported. Consequently, most assume air travel is much more dangerous.
Similarly, when stocks crash, it effects all investors at the same time, it is a major news event, and it is reported in full detail and extensively in the media. Consequently, stock investing seems risky and a huge gamble.
In reality, stock investing is as risky as you make it. Although some investors structure their portfolios and their investing approach in a very risky (and many times irresponsible) way, this does not mean you have to do the same. The wonderful thing about the stock market is that it is flexible enough that every investor can use it in a way that is best suited for him or her.
If you do not want to take on a huge amount of risk in the market, it would be better to make your investment in dividend producing stocks. These stocks are considered safer than other stock investment options. Buy the stocks of those companies that pay solid and growing dividends to their investors. Your one time investment will bring you dividends every month, quarter, six month, or year, as the company that you invest in pays. To make sure that you are buying the right company, you can take help of stock research sites. They will suggest to you the best ideas.
Dividend-paying stocks are just one example. You can invest in other stocks that will help you reduce your risk exposure. But for this, you will have to do a more thorough research of the research. In other words, you will have to study the different stock research sites and favor those that try to beat the market in terms of risk as well as return. These are fewer in number than general stock research sites, but they are available.