Posted as many investors are not in the know on how to cut the risks of making wrong investment choices. The article below from eHow.com gives some very good tips.

For one, do not leave everything in the hands of your brokers.  They earn money for every investment they make for you, whether it earns you money or not.  Do your homework and have 100% control over what is allowed and what isn’t – you broker cannot invest in something you have not approved of.

Step 1
Pick stocks that have huge double- or triple-digit growth. In spite of other drawbacks a company may have, if you invest in stocks with massive growth, a slowdown will not affect the growth of the stock very much. Make sure this growth, however, is not at the expense of other factors.

Step2
Look for stocks that are undervalued based on the company’s assets and cash flows.  Find good stocks that are disliked during a recession because of external factors and not because of the viability of the company.

Step3
Opt for companies that have economic independence and are not vulnerable to the fluctuations of the U.S. economy. Good examples are debt collection agencies and companies that have a good part of their revenues coming from overseas.

Step4
Select defensive stocks that focus on drugs or food. These goods are necessary even in down times, and people don’t stop eating just because there is a recession. (My comment: there’s a bad in trading in Drugs stocks – for one, many drugs do not cure and they do not help people become healthier. I’d rather select food stocks – more ethical.)

Step5
Protect yourself with dividend stocks.  Companies that offer a high dividend yield will be like shelter in a storm and will give you income even in difficult times.