newbee03: You do need stocks that don't tank completely. You need a crystal ball for that. Lacking that, diversification, as others like the Grabber post 19068 mentioned. Others do mutual funds (proprietary or ETFs).
Most people jump on a stock that they think is going up or will go up. Then what? Or they dump a stock that is going down. Then what? Now, if you had a crystal ball and could actually pick tops and bottoms, then you could follow the conventional wisdom and do OK. Do you or your friend actually have a crystal ball?
Technical Analysis (TA) is, for most people, a VERY cloudy crystal ball.
Now, ask yourself and your friend: When the crowd is jumping on -- buying -- a rising stock, WHO is selling to them? When the crowd is panicking and dumping a falling stock, WHO is buying from them? Answer: Us AIMsters among others.
As Baron Rothschild once (reputedly) said, "Buy when the blood is running in the streets."
Tom Veale's motto is something like: "Buy from the scared, sell to the greedy." (See the little gif at the end of his posts.)
