Over-the-counter (OTC) equities
Non-Exchange listed Stock
OTC Stocks are not traded or governed on a public exchange like the New York Stock Exchange. The OTC market is where securities trade via a broker-dealer network instead of on a centralized exchange like the New York Stock Exchange.
Risky or Not?
All Stocks include some level of risk. There are specific risks when buying an OTC stock when compared to a exchange-listed stock. For example, OTC equities aren't always liquid, meaning it isn't always easy to buy or sell a particular security.
Finding a Competitive edge
The Economic Moat
A competitive edge helps a company secure and maintain a larger share of the market. Investing in companies with a competitive edge should be highly considered because it increases the likelihood of sustainable growth, profitability, and long-term success. A strong competitive advantage protects the company from being easily overtaken by competitors.
The concept of an “economic moat,” popularized by Warren Buffett, highlights the importance of a company having durable competitive advantages that protect its long-term profitability and market position.
Recession Proof Sectors
Sustaining a down economy
I would consider Healthcare, Utilities & Energy sectors more likely to be less effected in a recession or bad economy. Folks will require Healthcare, need light, Oil and running water regardless of what the Economy looks like.
Using the Beta Metrics
Volatility vs the Market
In the stock market, a Beta score (or Beta coefficient) measures a stock's volatility relative to the overall market, typically represented by a benchmark index like the S&P 500. It is a key metric used in finance to evaluate a stock's risk and how it responds to market movements. A Beta score less than 1.00 tends to be less volatile compared to the rest of the Market. Although having a Beta score higher than 1.00 doesn't always guarantee the Stock's movement.
Understanding the Company
Invest in what you know
As a new Investor, the more you understand how a Company works and earns income, the more sound investing decisions you can make. Having familiarity with your Investment is always a good thing, it helps you avoid mistakes and helps you potentially get ahead of a potential down turn.
Conclusion
A lack of knowledge about a market can lead to poor investment choices. By understanding potential risks, such as currency fluctuations, political instability, or economic downturns, you can make better decisions and protect your capital.
New Investors often read the article below
9 factors that will cause new Investors to fail in 2025
Venturing into the world of stock investment can be daunting for newcomers. To embark on this financial journey successfully, one must grasp the fundamentals. Stocks represent ownership in a company, and investing in them means purchasing a share of that ownership. Understanding how this market operates is crucial for making informed decisions. Click here to read the full article.
Disclosure
This post was solely written based on my opinion and should not be used as financial advice. Always consider your Investor profile and do your own research prior to making Investment decisions. Market Chat has a partnership with Amazon's Affiliate Associate program, this website may contain Affiliate links that redirect to Amazon.com. Market Chat my earn a small commission on qualified purchases at no additional cost to you. Thank you.