What kind of stocks are safe and have potential to provide steady return?

What kind of stocks are safe and have potential to provide steady return?

Warren Buffett has a clear strategy for making money. He says, "The first rule of investing is don't lose money; the second rule is don't forget Rule No. 1."

Following the above advice, prior to investing stocks, it is recommended to identify what kinds of stocks are safe.Then, to identify which stocks have high return.

Usually, stocks with large cap (above $10 billion) best reserve for the investors who want steady appreciation with great safety.

How to identify these stocks? S&P 500 index (500 companies), Dow Jones index (30 companies) and Nasdaq 100 index (100 companies) are good references. But, I usually identify these kinds of stocks from the 500 larges companies in the list of S&P500.

Once we identify some stocks through S&P 500 index, what is the next step? It should be aware that not all stocks with large cap have good return.All stocks have risk and volatility. Because the growth of a stock is related to management team, market, policy, new technology development, etc. It is difficult to predict the growth correctly. Therefore, I prefer to dividend stocks (dividend yield > 5%) with steady growth instead of high growth stocks without dividend. No matter how the market changes, I can get dividend steadily. This kind of passive income will reduce the loss due to the volatility in stock market. If the price of the stock rises, I can also get the appreciation of the stock. The return of my investment includes the money that I make from the stock's capital appreciation and the money I make from the the stock's dividend.

In summary, the stock of a company with a market capitalization value of more than $10 billion and steady growth dividend may need your attention.