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pay stocks monthly, quarterly or even bi-annually so if you are looking for income every month, check for companies that do so monthly.

I also thought that if I put a minimum amount of money into a specific stock, I would minimize my risks. This guideline may be true, but at the same time, it takes money to make money. If you invest only $5000 into a stock, your profits will be less than if you invested $10,000 where you profits would double. The same would be with losses. Again, this is a personal strategy but I like the concept of $10,000 because it is easier to calculate the gains overall. Obviously, upping the ante brings its own risks, so in picking stocks with dividend yields, we are cushioning ourselves should there be a downward movement.

However, one must be careful in scouting for stocks that give unusually high yields. High dividends can also carry high risk unless one invests in blue-chip stocks, stocks which have been around for decades and are deemed as relatively safe, like Johnson and Johnson. Moreover, they are more expensive to purchase.

In closing, what I have learned in the stock market is one cannot expect every stock that is picked to go up. One can only hope that the gains are greater than the losses and the choices an investor makes will balance themselves out in our attempt to "diversify our risks".

Learn more about this author, A. Major.
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