4. “Buy Stocks of Companies Which have Simple Products and Services”

For very new investors it’s crucial to buy stocks of those companies which have simple products and services. The logic behind this is that we need to thoroughly understand the stocks we are investing into. If we do not understand the nitty-gritty’s of the company we are investing in, we are bound to make mistakes. So, in order to avoid blunders in selecting stocks, we must start with those ones of which we have thorough knowledge. This also helps in grasping the business process before we go for a particular stock.