11 Best Stocks to Buy For Beginners
Picking the right stocks for your investment goals and budget is an important first step toward building wealth in the stock market.
But with thousands of stocks to choose from, it can be overwhelming for new investors to decide which stocks to buy in their brokerage accounts. Today’s market uncertainty doesn’t make it any easier, either.
In this post, you will learn about the 11 best stocks to buy for beginner investors. I’m also going to cover some underlying investment strategies and tips that factor into my selections.
The Best Stocks To Buy for Beginners Right Now
Here are the 11 best stocks for beginners to buy:
- Amazon (NASDAQ: AMZN)
- Alphabet (NASDAQ: GOOG)
- Apple (NASDAQ: AAPL)
- Disney (NYSE: DIS)
- Facebook (NASDAQ: FB)
- Microsoft (NASDAQ: MSFT)
- Netflix (NASDAQ: NFLX)
- Nike (NYSE: NKE)
- Pinterest (NYSE: PINS)
- Spotify (NYSE: SPOT)
- Tesla (NASDAQ: TSLA)
Note: This list is in alphabetical order, and doesn’t include ETFs, index funds, or mutual funds, which I cover separately.
Amazon (NASDAQ: AMZN)
Amazon (AMZN) is one of the best-performing stocks of all-time, and one of my personal favorites. Not only because I’ve made a ton of money from it, but also because I see the company as very well-positioned for growth in the future.
With Amazon’s stock price around $3,000 at the time of this writing, you may have to purchase fractional shares to get your hands on some. But don’t let that scare you away.
It’s hard to believe it, but Amazon’s stock has tripled in value over the past three years. Their annual revenue has more than doubled in that same time period.
It’s impossible to know how high Amazon will go, but I will most certainly be along for the ride.
Alphabet (NASDAQ: GOOG)
Alphabet is the parent company of search giant Google. The company oversees all products and services related to Google Ads, Android, Chrome, Google Cloud, YouTube, Google Maps, and more.
Positioned to do over $150 billion in revenue in 2020, and over $200 billion in revenue in 2021, Alphabet is one of the world’s largest and most profitable companies. In one way or another, their products and services are embedded in nearly every computer and mobile device on the planet.
As of late, Alphabet’s stock price has swung a bit due to market volatility and also regulatory and compliance issues. All that aside, I think Alphabet is a solid buy-and-hold stock for new investors — especially those looking to dabble with fractional shares.
Apple (NASDAQ: AAPL)
Apple is another top tech stock that consistently reports top-ranking revenue numbers and returns for investors. This makes Apple a solid buy-and-hold choice for beginner investors.
Apple is most famous for inventing the iPhone, iPad, iTunes, AppleTV, iCloud, and Apple Watch. Apple also designs and manufactures a wide range of high-end personal computers, like the Macbook Pro and Macbook Air.
Shares are currently around $375 at the time of this writing. They aren’t as expensive as Google or Amazon, but they aren’t cheap, either. Either way, their returns are hard to beat.
If you invested $5,000 in AAPL five years ago, those shares would be worth around $15,000 today. Not too shabby!
Disney (NYSE: DIS)
The Walt Disney Company’s holdings stretch far beyond the Magic Kingdom. Under the Disney umbrella, you’ll find ESPN, Fox, Marvel, Lucasfilm (Star Wars), National Geographic, and a wide range of vacation-oriented locations and services located throughout the world.
Suffice it to say that today and into the future, everybody either wants to watch a Disney-backed movie or TV show or visit one of their many theme parks.
In my opinion, their massive reach, and ability to engage consumers all over the world, and of all ages, makes Disney a solid buy-and-hold stock for beginners. And that’s not to mention the recent launch of Disney+, the company’s recently launched video-on-demand streaming service, and up-and-coming Netflix competitor.
Facebook (NASDAQ: FB)
Facebook is the social media and advertising giant that was founded by Mark Zuckerberg. The company’s current stock price is around $240, which is about six times higher than it was during its IPO in 2012.
The company also owns Instagram and WhatsApp. Together, their products and services have over 2.6 billion active users as of the first quarter of 2020. That means one out of every three people on the planet uses their platforms. Wow!
With numbers like that, it’s easy to see why so many beginning investors are getting on board with Facebook shares. The company has a massive audience all over the world of engaged users and continues making smart investments (e.g., Oculus virtual reality). Add it all up, and Facebook seems poised to continue marching toward a $1 trillion market cap.
Microsoft (NASDAQ: MSFT)
Microsoft used to be the most valuable stock in the world before Google and Amazon overtook them.
Still, Microsoft is holding strong, providing millions of users with computers, hardware, software, and cloud computing throughout every corner of the globe. In large part, this is due to CEO Satya Nadella’s impressive tenure at the head of the company, where he’s overseen the acquisition of GitHub, heavy investments in Azure, the company’s cloud computing platform, and the release of services like Microsoft Teams.
Despite the global pandemic, Microsoft stock has risen to an all-time high at around $211 per share at the time of this writing.
Microsoft’s recent performance is proof of the value of buying and holding when it comes to blue-chip stocks. And that’s precisely why I recommend Microsoft as a solid stock to buy for beginners.
Netflix (NASDAQ: NFLX)
Netflix is the pioneer of streaming video. The company is on pace to exceed $24 billion in revenue in 2020, serving over 182 million subscribers around the world.
One thing I really like about Netflix is that it still has so much potential to grow its market share. Currently, less than half of Netflix’s subscribers are located in the United States. As highly-populated countries like Brazil and India continue to modernize their internet infrastructure, it’s safe to assume that Netflix stands to benefit in the form of tens of millions of additional subscribers.
I also wouldn’t be surprised if one of the other companies on this list — like Apple — decided to buy Netflix one day. Apple is sitting on a ton of cash and hasn’t really come up with a new line of products in a while. Maybe Apple decides to use some of that cash to make a splashy acquisition over the next few years? Who knows?
One thing’s for certain: I’m keeping Netflix in my portfolio to capture my slice of that potential upside, just in case.
Nike (NYSE: NKE)
Nike is the largest manufacturer and supplier of athletic shoes and sports equipment in the world. Since 2016, the company has consistently exceeded $30 billion in annual revenue. And, like all of the stocks in this post, the company’s share value continues to rise over time.
Nike is another one of those safe, blue-chip stocks from the leader in its segment. This is purely my own speculation, but as the population continues to grow, so too, should Nike’s global reach.
It’s worth noting that most of the companies on this list are tech companies. Any good portfolio should be balanced, so adding a solid retailer like Nike to your portfolio is always a good way to diversify your investments.
Pinterest (NYSE: PINS)
Pinterest went public in 2019. The company offers a visually-focused social media platform that gives people a unique way to share and learn about travel experiences, design and decor, art, recipe ideas, and more.
Personally, I think Pinterest is a solid buy, and it could be a great bargain right now. While their stock price has been somewhat of a rollercoaster since their IPO, it feels like almost every big tech stock experiences ups and downs in the early years.
As Pinterest figures out additional ways to monetize its platform and grow its user base, don’t be surprised to see its stock growth accelerate.
Spotify (NYSE: SPOT)
Spotify’s stock value is on fire lately due to its recent partnerships with Kim Kardashian West and Joe Rogan. Pundits believe that these celebrity endorsements help the streaming music juggernaut stand out from its competition, and that over time, the company should continue to gain market share.
Currently, Spotify has over 124 million paid subscribers and over 270 million active users on the platform. It’s hard to predict how much higher their stock will climb. At the time of this writing, Spotify costs $270 per share, up from around $149 during its IPO in 2018.
If I were considering buying Spotify right now, I would probably wait a couple weeks to see if the recent price surge is sustainable or is going to be a blip on the radar. Just my two cents!
Tesla (NASDAQ: TSLA)
Tesla is one of my favorite stocks. Not only because I’ve made a ton of money with it but because I’m such a huge fan of the company’s innovative technology and potential for future digital disruption.
If you’re a firm believer that electric cars are the future of automotive transit, and you’re a fan of Elon Musk’s bold visions, Tesla could be a solid addition to your portfolio. Keep in mind Tesla isn’t just cars, either. The company is also focused on disrupting the battery sector and purchased SolarCity a few years ago.
However, with share prices approaching $1,500, you may need to get started with fractional shares if you want to add Tesla to your portfolio.
Stock Market Investing Tips for Beginners
1. Invest in Companies That You Understand
This might sound like common sense. But I’ve seen too many people invest in stocks (and therefore, in companies) purely based on advice from a friend, something they heard on the news or even a mere whim. All too often, I’ve heard the horror stories of stocks losing massive amounts of value in a short time, making shares virtually worthless.
To avoid that fate, I only recommend investing in companies that are easy to understand and that have a proven track record.
For example, let’s say you like Apple (AAPL) or Amazon (AMZN). Either would be a relatively straightforward investment. You are buying shares of a mature business whose services you probably use — and whose values are consistently increasing over time.
2. Don’t Time The Market
According to the Oracle of Omaha, Warren Buffett, “trying to time the market” is the number one mistake that new investors make. That means don’t try to buy a stock when you think the price is low — it could dip even lower the very next day.
Instead, purchase a stock of a company that is likely to increase in value over time — regardless of what you might be hearing about the company in the news or from friends.
3. Avoid Penny Stocks
If a deal seems too good to be true, it probably is.
Such is the case with pretty much all penny stocks, which is why I don’t recommend them. Generally speaking, companies that are available on penny stock exchanges are not as well-positioned for growth and, therefore, can’t provide competitive returns over time.
4. Consider Buying Fractional Shares
The high prices of many blue-chip stocks are a common barrier to first-time investors. For example, if you only have a few hundred bucks saved, you can’t even buy one share of Google (GOOG), which is currently hovering around $1,500, or Amazon (AMZN), which is currently over $3,000!
If this sounds like your situation, where you don’t have a ton of money saved but would still like to get your hands on some prime blue-chip stocks, you’re in luck.
Companies Offering Fractional Shares:
For as little as $5 you can get a slice of a blue-chip stock. These fractional shares can be built up over time or sold like a normal stock.
Eventually, you might even be able to piece together several whole shares of stock by sticking to the course and buying fractional shares on a regular basis.
5. Stay the Course
If you want to be successful in the stock market, you cannot respond emotionally to market shifts or trending news topics. Stock investing is a long game. The only way to really see a return is to experience compounded growth, which builds up over years, as you continue to invest your money in certain funds.
Even seasoned investors like myself fall for the same trap of selling stocks when worried that those funds might sharply decline — due to a pandemic, for example. Unfortunately, we find out the hard way a few months later that those stocks that were sold potentially at a loss are now worth even more.
Staying the course also means being disciplined with buying shares over time. Find an investment schedule that works for you — for example, buying new shares on a monthly or quarterly basis — and stick to it.
If you only buy a handful of shares once, your earning potential will be far lower than if you purchase hundreds or even thousands of shares of that same stock over several years.
Additional Investing Resources:
- How To Start Investing For Beginners
- How To Start Investing in Stocks
- Start Investing with Little Money
- Best Low-Risk Investments
Picking the Best Starting Portfolio for You
When you buy a share of stock, you’re literally buying a piece of that company. If you’re still unsure of where to start, I recommend doing some soul searching and devising a game plan before jumping in.
Are there any companies on the above list with values, products, and services you agree with? What about other companies not on this list? Who do you think will be even bigger 30 years down the line when it’s time to cash in your retirement chips?
Once you identify a few companies that fit your criteria and risk tolerance, the next step is purchasing shares in your brokerage account.
By following the tips outlined above, and investing in any of the above stocks, chances are you will be happy you did. Here’s to finding the right stocks for you so your money can grow for you while you’re living your best life.