Are you looking to enter into an exciting investing journey but not sure where to start or what it means to buy into a company? Perhaps you are looking for guidance as to what stocks are perfect for beginner investors.
No need to panic, as we have chosen 15 of the best stocks to invest in on the market today for beginners along with a helpful guide of what is entailed within stock trading.
When looking to enter the stock market many questions might start swirling around your mind. Questions from what is stock trading to how does it work in picking the best stocks to invest in.
This all comes down to learning and building knowledge in all areas within the trading industry, and not just at the beginning of your journey but to continue throughout, as dedicated investing is ultimately what makes an investor successful especially in the long-term.
When it comes to researching exactly what is entailed in how to start trading or the amount of stocks on that market that are available for investors to buy into, this can be slightly overwhelming which is why it is advised to take your time and research so you know exactly what you are heading into.
Having said this, before we look at the top stocks to invest in for beginners we have written a helpful guide with key starting points for you to understand and to incorporate these factors into the start of your trading journey.
What Is The Stock Market And What Is An Investment?
To start right at the beginning the stock market is a place where shares of publicly listed companies are traded, it is like a big giant supermarket.
The stock market is made up of many markets or exchanges set across the globe where investors are able to take part in the buying, selling, holding and insuring of shares of companies.
Additionally, you will come across the term stock exchange which many get confused with the two definitions. To clarify stock exchange is an important compartment within the stock market, take the New York Stock Exchange (NYSE) as an example. So the term stock market is a general reference to all of the markets or exchanges.
Then we move forward to what is an investment.
An investment in simpler terms is when an individual places money into an item or company that has the potential of looking at generating future income or some may say to appreciate in value.
An investment can be pushed into many mainstream avenues such as stocks, bonds, funds, real-estate investments and more. To add on to the term of an investment, an investor can look to have many investments, which in this instance we will stick to stocks where an investor can have many, and is strongly advised as it reduces risk elements for an investor so that they are not solely relying on just one stock to perform.
The difference between an investment and a gamble is what sparks many potential investors to second guess their thoughts in entering the stock market.
But this route of investing holds many positive factors, especially if it's done with due diligence and using time wisely into researching various stocks, it can be extremely rewarding proving as many investors have become extremely successful over time.
However, investing in stocks still holds its own risk elements and can be deemed to be risky as it is not 100% guaranteed that you will get your money back or even make a profit.
Stock Market Investing Tips for Beginners
Now we have briefly outlined what stock market and investment are, it is now time to look at the steps advised that beginner investors should look over before considering to invest within stocks.
1. Determine Your Future Goal
Okay, this first step is simple. Many investors who seek to invest in stocks generally have one common interest, to make a profit.
However, what many beginner investors sometimes blindside is that in order to be successful as mentioned, realistically you have to put the work in. Leaving this step coming in first to confirm what you are looking for before you enter the stock market.
If the reason you are entering is to make money quickly, again you still need to be smart going about it. As quickly as you place money into something, the quicker you can lose it. So it is wise to establish what your goals are in the long-term outlook.
If the interest in investing in stocks is what you are here for, there are many forms of ways you can invest. You can invest in individual or multiple stocks which is highly recommended after doing research on an on-going basis.
Then there are funds that are deemed to be safer bets than individual stocks. Although poised to give less excitement to investors because they are safer investments, these funds are perfect additions for beginners, let's explore some of the various fund options.
Index Funds: Index Funds are becoming very popular and have been over time. This popular investment vehicle such as the Vanguard Total Stock Market Index (VTSMX), which holds over 3,500 public stocks within its index is a great investment. Not only do these funds offer diversity but on average are cheaper investments yet can still deliver high returns.
Exchange-traded Funds (ETFs): ETFs again are a popular form of investing for beginner investors. An Exchange-traded fund commonly known as an ETF enables investors to buy many stocks or bonds at once. The basket of securities can have a mix of it all enabling an investor to have more security through their trading journey. A good example of a performing ETF is the SPDR Dow Jones Industrial Average ETF (DIA) which returned just under 25% over the past year.
Mutual Funds: Mutual Funds are very similar in ways to ETFs where it is a collection of investment assets brought in as one allowing great exposure to the stock market. However, Mutual funds are typically managed more actively with buying and selling of assets. This leads to the main difference between an EFT and a mutual fund being that you can only buy or sell mutual funds at the end of the trading day, whereas with EFTs investors can buy or sell at any point throughout the day, similar to stocks.
Bonds: The last form of investing is that of Bonds. Many investors are slightly unsure as to what is entailed with bonds. But these investments actually offer great diversity along with calming volatility within your portfolio of stocks. A bond is simply a loan taken out by a company which then seeks to gain money from investors in the form of bonds. The key difference is that these investments do not give capital, it's exchanged with interest coupons which are paid either annually or semiannually.
2. Create And Make A Budget Plan
The next step to undertake is to look at your financials. Of course, this is arguably the most important factor for all inventors both at the start and on-going throughout your trading journey.
Making or creating a budget of your personal liabilities and setting them aside from your disposal income is essential. The last outcome any investor wants is to be faced with any potential debt or unpaid bills that were not calculated for.
When it comes to investing, the more money you hold within an investment, naturally the more an investor will seek to be returned, all being well. But if an investor manages to get in on a stock at the right time it can be a lot cheaper than you think and can offer great returns as the stock builds on its growth over time.
3. Have A Plan B
Following on from creating an investing budget, the next step to consider is to look at having a plan B or an emergency back up plan.
As mentioned, when investing nothing is ever guaranteed and things can change in what feels like overnight, so it's wise to always have a safety net.
Having additional funds set aside is strongly recommended for many reasons within trading. Whether it be that you have only one stock that potentially has not performed and you are seeking to re-invest, or perhaps it has occurred to you along the way that you wish to create a diverse portfolio but did not factor this entirely right within your budget.
Either way, this avenue of having a plan B is a strongly recommended one to take.
4. Choosing A Broker
Now moving on to the next step, choosing the right broker to begin your trading journey with.
There are many online stock brokers and additionally, online trading platforms to choose from on the market today that offer an array of various different advantages, including zero commission fees to having access to most, or if not all, of the best stocks on the market to invest in.
When looking for a suitable broker it is wise to think ahead by looking at the bigger image of what that broker can offer you is essential.
As we are starting from the beginning, educational material is a big helpful factor for a beginner investor, as no amount of information is too much information to know before beginning your journey. Additionally, if you have chosen to use an online trading platform where you have a chosen broker, all of the educational material will be ready and available for you to access at a few clicks of a button.
Secondly as mentioned, not all brokers have access to international markets which is a big factor to look at when choosing a broker, as it may leave the inconvenience down the line of starting the process again if you are wanting exposure into international stocks.
Lastly, many brokers who are a part of online trading platforms additionally offer user-friendly services including a virtual platform to be able to practice trading and get to grips of how trading operates. Additionally, many will offer customer service support to be able to connect with at any given time.
One leading online platform we highly recommend is eToro. The award-winning online trading platform has access to it all including top brokers, access to the best-performing stocks and international stocks on the market today along with the added benefit of zero commission fees.
5. Choosing Your Top Stocks To Invest In
Then it brings us to the last point of picking your chosen stocks picks before you are officially sworn into the world of investing.
Before we take a look at the list of the top 15 best beginner-friendly stock ideas to invest in, we thought it might be wise to give a few pointers on what to look to create and to look for within stocks, whilst advising the areas to avoid within your trading journey.
The first tip is to look to seeking to create a diverse portfolio. Not only will you potentially look to seek good capital but this will also help reduce risk and volatility within your collection of stocks. To start, have a ‘base’ collection of stocks and seek to add more along the way.
Learn the basics of picking the best stocks. Having the main understanding of the stock market and how trading works is vital, so you know exactly what you are going into. It may take some time for you to fully understand and work out key metrics such as P/E ratio or P/B ratios, but as long as you understand the basics of a stocks key financial statistics such as Revenue, Share Price and other key elements, that is the main point to address, the rest of the understanding will come with time and learning.
Invest in stocks you understand well. To start, invest in stocks that are simple and that you understand well until you feel more confident to explore. For example, choosing a stock that you do not know much about or the industry in which it sits in, is not only a challenge for you to understand but can also be risky. Sticking to what you know and understand to start with is key.
Avoid ‘Hot-Tips’ and Penny stocks. The last thing any investor wants to do when starting out within their trading journey is adding elements that can potentially seize all before it lifts off. This is why it's wise not to take on board ‘hot-tips’ and also wise to avoid Penny stocks due to strong risk elements and scams.
Avoid high-risk volatility stocks at the beginning. Besides the list of the 15 best beginner stocks listed below, there are many stocks that are very attractive on the market today but come with more risk factors, as these stocks have proven to show high levels of volatility over the year and previous years. But once you have established your understanding and you feel ready, then look set to explore these stocks or potentially add these to your portfolio in the future if you feel that these stocks can benefit you.
6. Stay Invested For The Long-Haul
The last point to mention within this guide is also one of the most important points.
Once you have chosen your stocks and have invested, keeping them for the long-haul is ultimately what is going to make you make money. Which is why it is highly recommended and wise to factor in as much research as possible to be a step ahead of the game, alongside investing in stocks in whichever pattern suits you best.
Another important point to keep in mind is not to fall short on your emotions and become panicked by what is happening to a stock. This ultimately leaves you to potentially make rash decisions like selling your investments which could end up being one of your biggest trading mistakes. A prime example is what many investors will have been victims of during the current pandemic, as at mid March 2020 saw some stocks dipping significantly, but yet went on to deliver.
For this, it is wise to breathe, take everything in and give it enough time to see what is about to unfold before you make any rash decisions.
There you have the six key points to undertake before beginning your journey into stock trading. Now it’s time for the exciting part to take a look at which stocks are the best beginner stocks to buy on the market today with a small thesis on each of the solid investments.
What Are The Best Stocks To Buy For Beginners?
Facebook (FB)
The social media tycoon Facebook (FB) is a wonderful beginner stock to buy.
The stock that also owns Whatsapp and Instagram under its wing is still continuing to be a raving success with another futuristic addition of that of the virtual Oculus technology designs. As of the first quarter in 2021 the stock had over 2.8 billion active users and has a market capitalisation of just under $750 billion, close to hitting the impressive $1 Trillion mark.
FB stock sits on a share price of $264.90 which is considered a great value for what this stock can achieve and has been listed as a ‘Strong Buy’ by many Wall Street analysts.
Facebook is most definitely going to continue its successful growth story for many years to come.
Apple (AAPL)
The iconic tech stock that is also one of the biggest stocks on the market today is a perfect definition of buy-and-hold stock.
Going from strength to strength with its products such as the iPhone, iPad, Apple Watch and more, not to mention Apple’s hands in designing and manufacturing its computing products such as Macbook Air and Macbook Pro which AAPL have recently confirmed will produce mass production of 14’ and 16-inch units in the second half of 2021.
This will add to the stocks growing revenue whilst it sits on a market capitalisation of $2.04T with a reasonable share price of $119.98.
Alphabet (GOOG)
The parent company to Google is also the main overseer of all Google Ads, Youtube, Chrome and more operating under its wing.
Alphabet’s products and services are dominating in all areas and above competitors, leading GOOG to be one of the largest tech companies based on revenue in the world. The stocks revenue hit just under $183 billion in the fiscal year 2020 up from $161 billion in 2019. With YouTube Ad revenue being up 46% to $6.89 billion over the year.
GOOG stock does not sit cheaply in relation to other stocks on the list as it sits on a share price of $2,097.
Netflix (NFLX)
The largest streaming service in the world is becoming a solid favourite for many investors.
NFLX hit $25 Billion in annual revenue in 2020 up by 24% year-over-year, with a record of over 37 million paid memberships leading growth in operating profit to 76% to $4.6 billion in 2020.
With the stocks ongoing new and diverse movie additions adding to its channel, along with the company’s original ‘Netflix Original' products, this is only going to carry on spiralling in popularity moving ahead. Aside, there has been strong talks of NFLX looking to expand their growth in cinema chains looking ahead, so watch this space.
Tesla (TSLA)
If you have been looking at which stocks are the best buys on the market today, you will no doubt have come across this booming automotive company Tesla Inc (TSLA).
The future is electric in leading to an eco-friendly future, resulting in less harmful emissions being released into the air. Ran by arguably one of the world's most visionary investors, Elon Musk, suggests that without a shadow of a doubt, this stock is going to continue to evolve pushing boundaries within its divisions including with the stocks leading new Battery Cell products.
In 2020 the company managed to deliver just under 500,000 vehicles whilst the stocks Regulatory credit revenue is set to increase to a potential $2 billion in 2021 up from $1.4 billion in 2020.
This leading automotive stock holds a price tag of $689.42 and has been given a forecast price target by Wall Street analysts of $900, an upside of just under 34% of today's price.
Square (SQ)
Square Inc (SQ) is an American financial services and mobile payment company that has grown well over the past year and reached new highs within its shares last month with a share price of $276.57.
This stock blossomed over 2020 brought on vastly by the Covid-19 pandemic, enabling SQ stock to adapt to help its customers operate within these challenging times. This saw gross profit rise by 45% year-over-year to $2.73 billion, the company’s Cash App generated a whopping $1.23 billion in gross profit an increase of 128% YoY and the stocks Seller ecosystem grew by 8% to $1.51 billion over the year.
In recent days, SQ stock has gained Jay-Z’s stake in the Norweigan streaming service company Tidal, which has driven the rise in SQ stocks share price today to $238.00.
This stock is a strong, futuristic financial service stock that is seeking new avenues to add to its growth plans to push for further success.
Microsoft (MSFT)
A tech stock that is a proven safe investment for beginner investors is the ‘blue-chip’ stock Microsoft (MSFT).
Bill Gates and Paul Allen's tycoon tech company is still proving to be a worthy winner within its field. With its leading software, computer, hardware, cloud computing and more, the stock is also home to the game console Xbox which has been a popular choice for gamers across the globe over the years.
At the start of this year, MSFT stock reported a 17% increase in revenue to $43.1 billion. This was hugely pushed on due to the drive in consumer demand for Microsoft products brought on due to recent global events. Which leads to confirm that even in challenging times you can count on this stock to deliver the results.
Not only does MSFT stock deliver but it also offers great value. The stock sits on the market today as of writing this report at $238.57 which is proven to be undervalued, making now an opportune time for beginner investors to jump in to buy this iconic stock.
Walt Disney (DIS)
The company that makes ‘dreams come true’ is a stock worth much more than what beginner investors may initially thought of.
Walt Disney Co (DIS) of course is home to Disney Parks set across the globe with its notorious number one theme park being its biggest in the U.S state of Florida. Sadly, due to the ongoing pandemic DIS had to temporarily close its theme parks, along with store closures and halting its cruise liners.
But despite these huge setbacks, Disney+ the company's streaming service has proved to be the ‘bright spot’ for the company.
By the end of the fourth quarter, the stock had just over 73 million paid subscribers, beating expectations and yet still on the horizon to grow even further. In fact in the company's first-quarter 2021 report, DIS confirmed that its DTC side of the business set across all streaming services had hit over 146 million paid subscribers to date, being poised to achieve greater success as stated by CEO Bob Chapek for the future.
Shopify (SHOP)
The Canadian multinational e-commerce company Shopify Inc (SHOP) comes in as a modern day stock that beginner investors should consider.
Although this stock holds more risk factors than other stocks that have made the cut, it does still hold brilliant prospects. Granted, this stock does hold a higher price tag of $1,144 as of writing this report.
The way in which the world has had to adapt to new normal measures has pushed Shopifty to dominate within its space. The stock enables business owners to create their online presence with additional helping tools to track data to draw in more customers and manage daily operations.
In the post-Covid-19, analysts are predicting that this stock will still continue to deliver great results but it does hold a stronger risk element than other top performing stocks on this list but nonetheless is a great beginner investment to buy.
Amazon (AMZN)
Amazon Inc (AMZN), the biggest e-commerce to have graced the stock market, is a big force dominating in many divisions and is most definitely a stock favourite for investors.
As you will more than likely know, AMZN has the likes of Amazon.com its e-commerce site, AmazonPrime its streaming service and much, much more. But its new addition of the self-driving car company Zoox which the company acquired in 2020, is just another positive for the ever growing stock, enabling the company to continue to hit all time highs.
The stock currently holds a market capitalisation of $1.53 trillion with a share price of $3,057.
The stock's share price may be a hefty price for a beginner investor, but this price is great value for this mega stock, if it is within your budget, and has been given a price target by many wall street analysts showing a 40% upside to where the stock sits today.
Mcdonald’s (MCD)
Mcdonald's (MCD) is a wonderful beginner stock addition.
Granted, this stock does not hold the same growth potential as some of the other stocks, but MCD is poised in a good position looking ahead and has witnessed its stock increase by 16% just over a two year period to where it sits now.
Although MCD stock evidenced a decline within the company's most recent reports as revenue fell by 9% to $19.2 billion. This was mostly brought on due to the ongoing Covid-19 outbreak as stores across the globe have witnessed several closing periods, leaving many still standing in parts of the world closed preventing full operation.
But the stock is looking at a bright future as it is forecast to hit an almost 11% rise in revenue to $21.2 billion, with an upside within its share price as it has been targeted to rise by over 20% from the stocks current share price of $212.28.
A final point, Mcdonald’s is also a dividend stock that pays a quarterly dividend to its shareholders which recently delivered a $1.29 per share of common stock to its shareholders.
Costco Wholesale (COST)
The popular American wholesale corporation has become a solid investment for beginner investors over recent years.
As of 2020, Costco is the fifth largest retailer in the world and operates 804 warehouses worldwide. Providing everything from food essentials to toiletries to home appliances, there is not many things consumers can’t seek to find.
As of March 2021, COST reported its second-quarter results ending on February 14th with a rise in net sales of 14.7% to $43.89 billion within the quarter, with net sales for the first 24 week period up by 15.8% to $86.23 billion.
The stock is priced reasonably today at $328.77 where it hit its all time high back in November at $391.77. And an added extra for COST stock, just like MCD stock it pays a dividend every quarter to its shareholders which stands at $0.70 cents per share.
FedEx (FDX)
The American multinational delivery services company is expecting to beat expectations in the company’s next earnings report according to Zacks Rank Investment.
FDX has continued to deliver its way through the pandemic hitting new highs, and in the months between March and December of 2020 the stock almost rose just under 250%, where the stock sits on the market today at $268.49, under its 52-week high of $305.66.
Post Covid-19 the stock is looking a good investment, as it sits in a good financial stance, with an operating margin increase YoY and a $3.3 billion rise in revenue YoY to $20.6 Billion. Looking ahead the stock has prepared nicely for the future as it expects earnings potential to grow in 2021 due to demand in services with delivery volumes expected to increase by almost 3.5x as much in the five year outlook.
According to Zacks, FDX is potentially looking to hit a revenue increase of 13.5% within the recent quarter to $19.84 billion beating its Zacks revenue estimate.
General Motors (GM)
Following on to making the world a more greener-environment, General Motors Co (GM) is a solid multinational automotive company that has witnessed its sales soar over 300% over the past year, despite taking a loss at the start of 2020 due to the pandemic.
The lineup of electric vehicles that the stock has in production is impressive, and will no doubt be popular amongst consumers on the back of this stock's solid reputation it has built up over the years.
The hype surrounding the stocks electric Hummer is captivating both consumers and investors to this stock, additionally with the stocks best selling electric vehicles Chevrolet Bolt and Chevrolet Volt which are still proving to be many consumers EV of choice.
Based on the stock’s valuation, the stock is looking enlightening for the future ahead. And once more, this stock's valuation is also much more affordable than that of TSLA stock at a bargain share price of $56.40 with Wall Street analysts giving this stock a price target of $85.00, an upside of 50% to where it sits today.
Salesforce.com (CRM)
The cloud-based software company Salesforce.com (CRM) has been dominating within the cloud mainstream.
CRM stock has jumped within its share price through 2020 with the stock confirming a record-breaking third-quarter revenue of over $5 billion in 2020. For the stock’s full-year image, CRM hit an increase of 24% in revenue to $21.3 billion and is predicted to hit a guidance of 21% revenue growth for 2022.
The company provides customer relationship management (CRM) services along with additional complementary applications focused on customer service, marketing and more.
The stock is proving that it is on for a stellar run looking to the future, as many consumers were impacted financially during the pandemic. Proving that if this stock can gain impressive results over a challenging year, then this stock can certainly be a stock that is designed for the future.
Buy The Dip: The Best Stocks To Invest In Right Now
Over the past year, generally speaking, the market has witnessed a bullish market, despite many stocks being hit tremendously hard and witnessing stock sell-offs at a rapid speed. Likewise, because of the pandemic, it has left many stocks to take a ‘dip in price’ leaving now a good time for investors to consider buying into some of these top-performing stocks.
For a bull market, it is not such a bad thing to have a pause, as it not only allows the market to adjust itself but to get to grips with recent happenings.
In the meantime, investors can seek this opportunity to consider looking at such stocks that have dropped by looking at in depth reasoning as to why these stocks have taken a decline. Taking into consideration how the stock has performed over the recent months where investors can look at various charts or at key statistics on individual stocks that gives them an understanding as to why this stock has dipped and what this stock is capable of looking ahead.
Looking at the general overall picture will give you a clearer understanding if these stocks are worth buying whilst sitting at a generous price.
Having stated the above, three stocks on the list of 15 that are fantastic solid stocks for beginners to invest in today that offer great value and are great ‘Base’ stocks to add to their portfolio are Amazon (AMZN), Apple Inc (AAPL) and FedEx Corp (FDX).
1. Amazon (AMZN)
Amazon is a giant stock on the market today that is dominating in every shape and form that it can, leading to drawing in fantastic revenue results. Although this stock is not the cheapest on the market, and whilst it sits in a less upside spot than some of the smaller stocks, Amazon still has a glowing future with great growth prospects ahead which will dominate for many years to come, proving it to be a safe investment for beginner investors.
2. Apple (AAPL)
Likewise, the iconic brand Apple is continuing its way in becoming a beginner investors favourite. Sitting at a great share price of $121.96 today, the stock offers growth with its new and existing expanding range of products whilst it continues to be a firm favourite tech brand august consumers across the globe.
3. FedEx Corp (FDX)
The last chosen stock is FedEx (NYSE:FDX). Although this stock is not as big as the two mentioned above and is deemed to be riskier, this stock is a perfect example of stock on the rise and that has the potential to carry on delivering in the post Covid-19 world.
Picking The Best Starting Portfolio For You
When starting your trading journey, ultimately it is down to each investor's preference as to which companies they wish to buy into.
There is no pressure and no time limit that you have to archive in order to make your decisions, it just falls down to when you have conducted enough research and gained enough knowledge on various stocks of interest, then you can start to form your portfolio off the back of your understanding.
Of course, these chosen 15 stocks are great and safe additions that offer great value, a brilliant safety net in terms of low volatility (some more than others on the list) and who offer great long-term prospects.
But when you look at these top stocks or any other stocks of interest, look to see which could potentially be the greatest company over the next 20 years, as ultimately its the stocks growth potential mixed with the stocks strong revenues that is what is going to receive earnings.
Once you have chosen your stocks of choice that have met all your criteria factors, all you have left to do is go to your chosen broker and simply invest. Then you are officially on your way down an exciting, rewarding trading journey that could last you almost a lifetime.