There are many ways to go about choosing a stock or financial product that meets your needs. The first and foremost consideration is to be very honest about where you are in your financial life and what may be expected in coming months and years. The second most important is to be very truthful about what your current situation is and what your expenses are or could be. Lastly, before you consider your investment options, make sure you have at least six months of savings to cover unexpected financial considerations. Once you can meet these requirements, you can begin considering various investment choices.
If you are younger (20-30 with no attachments) you may want to be a bit more aggressive. This might indicate equities or stocks as a higher portion of your investment portfolio. If there are children involved, get that college fund started as soon as possible and remember that children are expensive so be a bit more conservative with a slightly higher concentration of bonds. As the children start to leave home, a shift toward retirement thoughts may be appropriate.
Fixed income has done well in the recent past and should never be neglected. Some inflation related products may be a thought with cash also figuring in. As retirement comes a larger portion of fixed income, bonds and certain dividend income producing blue-chips are important. Remember, however, you should always consult a registered investment advisor about your needs and conditions before making an investment because major loss is a consideration as well.