The Safest Stock to Buy Right Now
What's a safe stock? If you have a short-term mindset, there's no such thing. Any stock, no matter the strength of the underlying business or its growth prospects, could tumble in price at any time. In a bear market, the baby often gets thrown out with the bathwater.
If you're a long-term investor, a safe stock is one that is highly unlikely to deliver a permanent loss of capital. That doesn't mean there won't be a temporary loss of capital. Even shares of the most stable, resilient companies can crash during times of market turbulence. It means that the underlying company is unlikely to suffer an irreversible event that permanently impairs its revenue or profit.
Because no one can predict the future, it can be difficult to tell whether a stock is truly safe. Breakthrough technologies and products can upend industries in unpredictable ways. What looks stable can become unstable almost overnight. The safest stock is one where the underlying company hasn't put all its eggs in one basket, has immense financial resources, is willing to adapt as the environment changes, and has a decades-long track record.
Source Fool.com
