The Worst Types of Stocks to Buy

The worst types of stocks to buy are those prone to extreme bouts of volatility that can create big headaches – and losses – for investors.

Red tape with Danger written on it with bright yellow background
(Image credit: Getty Images)

When it comes to investing in the stock market, not every pick is a sure thing and many well-established companies can quickly turn into the worst stocks to buy.

Take General Motors (GM), the iconic automaker that filed for bankruptcy during the Global Financial Crisis. More recently, amid interest rate volatility in early 2023, Silicon Valley Bank and Signature Bank both declared bankruptcy despite commanding more than $300 billion in collective assets.

These failures of seemingly stable firms are painful illustrations of how all investing carries risk. That said, there are some corners of Wall Street populated by small and risky companies that are much more likely to end in disaster. 

There is no universal definition of the "best stocks to buy" or the "worst stocks to buy," as investor sentiment and the economic environment are constantly changing. But if you want to avoid investments that are most prone to trouble, you may want to steer clear of the following areas that are among the worst types of stocks to buy. 

Jeff Reeves
Contributing Writer,

Jeff Reeves writes about equity markets and exchange-traded funds for Kiplinger. A veteran journalist with extensive capital markets experience, Jeff has written about Wall Street and investing since 2008. His work has appeared in numerous respected finance outlets, including CNBC, the Fox Business Network, the Wall Street Journal digital network, USA Today and CNN Money.