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5 Safest Stocks From a Historical Perspective

The stock market may seem overwhelming, but here are five safe stocks from a historical perspective.

Justin Cupler

Contributing Writer at Tally

August 17, 2021

When you’re just getting into investing in the stock market, it may seem overwhelming with a nearly limitless number of stocks to pick from. Add to that the advice from the many “investment professionals” on the radio, television and online, and it’s easy for a beginner to get a little confused. 

If you’re looking to ease your way into investing in the stock market, it’s best to start with stocks that historically provide consistent returns. However, even the “safest” stocks come with a risk. In the stock market, there’s no guarantee of a return. 

While we can look at data to learn about some of the best returns historically, that doesn’t guarantee they’ll perform the same in the future. When it comes to investing, it can be helpful to gauge your goals and personal comfort level with risk in your investments.   

Let’s explore five of the most historically consistent stocks, and share a few alternatives to investing in a single stock.

First, invest in yourself 

Before investing in the stock market for returns, you should invest in your financial independence by paying off debt. 

Look at debt as a negative investment, and your interest rate as a negative rate of return. If you pay off a $5,000 debt with a 10% annual percentage rate (APR), you effectively saved the same amount of money you’d earn from the annual returns on an investment that yields 10% interest. Plus, there’s no risk involved. 


So, before tackling any significant investment strategy, consider paying off your high-interest credit card debts first and take advantage of the immediate savings. 

If you need help paying off high-interest credit card debt, Tally’s credit card debt repayment app can help. Not only does Tally pay your credit cards for you while you make only one monthly payment, but it also includes a low-interest line of credit1 if you qualify that you can use to pay down higher-interest credit card debts.

5 safest stocks to buy based on historical performance

If the stock market is the route for you, certain industries have historically provided consistent returns to investors. 

Keep in mind, you should always do your own research or speak with an investment advisor or financial advisor before investing in any stock. 

1. Recession-proof retail

Part of beginner stock trading is finding stability and avoiding too much volatility. Few stocks are as stable during an economic downturn as recession-proof retail stores. These consumer staples have a track record of being the go-to shops for Americans, regardless of economic conditions

2. Dividend Aristocrats

The most common way to earn money in the stock market is to have the stock price increase, but that’s not the only strategy. One popular way is by earning dividends, which are payouts companies make to shareholders based on their profits. 

Dividend Aristocrats are rock-solid companies that have paid out dividends for 25 consecutive years and showed dividend growth each year. That means these companies are consistently profitable and have shown enough growth for 25 straight years to increase those payouts.

3. E-commerce giants

As lockdowns during the COVID-19 pandemic forced shoppers online, we quickly learned that the e-commerce business model can support this country. These types of stocks can weather a significant storm, making them acceptable options for a beginner trader. 

4. Big tech

From the Apple Watch on your wrist to the iPhone in your pocket to the search engine you used to find this website, we’re constantly interfacing with these tech behemoths. 

This constant connection to our daily lives also makes these companies among some of the least volatile in the market, which could bring stability and consistent growth to your portfolio. As Groww notes, the major players in this space have seen consistent double-digit return percentages over the past decade. 

The struggle with big tech stocks is that their share prices are generally sky-high, making them out of reach for a beginner. But, you can usually purchase fractional shares of companies in the Big Tech category through an investment app, or you can invest in exchange-traded funds (ETFs) or mutual funds that include these stocks. 

5. Real estate investment trusts

Real estate investment trusts (REITs) specialize in income-producing properties, whether they are the owner of the property itself or simply a financier. 

REITs are good options for beginners for several reasons. First, they offer instant diversification, as an investment in one REIT can spread across multiple projects. So, if one building fails to produce income, there may be another one you’re investing in that is doing well, offsetting the poor performer. 

Also, REITs are required by law to pay out 90% of their income to shareholders as dividends. Most REITs actually pay out 100%. 

Finally, REITs consistently outperform stocks and bonds, according to Nareit, making them a relatively consistent investment with limited peaks and valleys.

Alternatives to individual stocks

Individual stocks can be a great way for beginners to get into the stock market, but there are other ways to invest in stocks that could be considered safe. 

Exchange-traded funds

Exchange-traded funds (ETFs) are investments you can purchase on the open stock market that track a specific industry, a commodity, bonds, currency or a particular index (such as the NASDAQ-100, NYSE 100 Index Fund, NYSE Composite Index or others). These are similar to mutual funds, but they are available on the open market, whereas you must purchase a mutual fund via the fund itself. 

Because ETFs are diverse by nature, they are typically not overly volatile and safe for beginning investors. Plus, they have low costs, so early investors can keep more of their hard-earned cash. 

The downside is since they are so diversified, the short-term payout will likely be lower than choosing an individual stock that performs well.

Mutual funds

Mutual funds are essentially the same as an ETF. They are a group of securities designed to track a specific index, commodity, industry, etc. The key difference is you can only purchase a mutual fund via the fund itself or through a brokerage. 

Like ETFs, mutual funds are naturally diverse, which mitigates big losses. However, diversification can also limit the return on investment.

Investing for your future

Investing in the stock market is a great way to diversify your retirement savings outside the typical 401(k) or IRA. It can also be an exciting way to earn extra money if you invest in the right stocks. As a beginner, though, you should focus on the safest stocks to buy.

These stocks will likely not make you an overnight billionaire, but they could be a safer way to get a feel for the stock market and learn the ropes. As your comfort level and understanding of the stock market grows, you may decide to invest in higher-risk areas that may result in higher earnings. 

Remember, the surest investment is getting yourself out of debt, and Tally’s credit card debt repayment app can help.

1To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) Will be between 7.90% – 29.99% per year, and will be based on your credit history. The APR will vary with the market based on the Prime Rate.