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We believe stocks, and the mutual funds that own them, are an important part of almost any investment strategy. As a stock investor, there are two basic ways you can make money:
With more than 65,000 stocks available around the world, it can be difficult to select the right ones for you. At Edward Jones, we are very selective about the types of stocks we recommend. We use a disciplined approach to find those that align with our investment philosophy and recommend you:
Because we are committed to quality investments, we don't promote the hottest, newest stock you heard about on TV last night. Over time, we've found that most people who go down that path are disappointed. That's why you may actually hear your financial advisor say "no." There are investments we just won't sell, like penny stocks, commodities and options. We believe there's too much risk.
At Edward Jones we like companies that pay a current dividend and offer the potential for long-term dividend growth. We believe these types of companies offer investors greater consistency and less volatility than lower-quality, non-dividend-paying stocks.
Diversification is a strategy to help make sure your investments aren't concentrated in a certain type or area. For example, an industry can experience a "bubble" where stocks become overpriced and don't really have any track record to speak of. But thousands of investors may put a huge amount of their stock money into shares in that industry. When the bubble bursts, these investors lose their principal. Spreading your money among many different sectors can help reduce your risk. Here are our suggestions for your stock allocation:
|Communication Services||Consumer Staples||Financial Services||Industrials||Technology|
|Consumer Discretionary||Energy||Health Care||Materials||Utilities|
Quality and diversification work only if you hold your investments through both good and bad markets. Even quality stocks can go down if the market drops, which may cause you to second-guess your strategy. Don't. Focus on the long-term and remain disciplined during short-term market volatility. Remember why you're investing and talk with your Edward Jones advisor.
We recommend a few strategies to help you maintain a discipline and a longer-term perspective.
It's important to talk with your Edward Jones advisor about what's appropriate for your specific circumstances. This includes a discussion about what your goals are, when you want to reach them and how much risk you're comfortable taking to get there.
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