Best Stocks for Beginner Investors

 Beginner investors will often tend to overreact to market swings by either selling early or buying late. Meanwhile, major institutional owners know to wait out those hiccups to continue reaping the much larger, long-term rewards.

What kind of stocks should I invest in as a beginner?

Certain industries can be notoriously fickle and are typically the first to take a plunge when the economy turns south. Staying away from sectors like retail, consumer goods and tech could save you from potentially devastating losses. The best safe stocks for beginners are generally large companies in defensive sectors like utilities, consumer staples (e.g., food, beverages or toiletries) or healthcare. These stocks have a good chance of protecting you from excessive risk.

Best Stocks for Beginner Investors

Apple Inc. (AAPL)

Apple is a consumer products darling, producing everything from iMac computers and iPhones to the Apple Watch. Its loyal fan base and continuous innovation have made Apple the largest company in the world in terms of market cap.

Microsoft Corp. (MSFT)

Microsoft is one of the largest companies in the world, and its ubiquitous Windows software is installed on nearly every personal computer around the globe. The company has kicked into a new gear recently, however, with booming cloud services revenues and partnerships with autonomous vehicle makers.

Coca-Cola (KO)

Famously one of Berkshire Hathaway CEO Warren Buffett’s favorite investments, Coca-Cola is a good example of a consumer staple that performs well even during economic downturns.

PepsiCo (PEP)

PepsiCo, the primary competitor of Coca-Cola, is another consumer staple that pays a strong dividend and has a very stable balance sheet.

Home Depot Inc. (HD)

Home Depot has had a great run since the beginning of the pandemic, as homeowners have spent money to improve their living spaces. But the truth is that Home Depot has always been a great performer, as there always has been — and likely always will be — a need for home improvement items.

Costco Wholesale Corp. (COST)

Costco is one of the most successful retailers in the world, with a reputation for great prices and a “treasure hunt” aspect to shopping in its stores. Consumers pay a membership fee just to shop there, and their renewal rate in the U.S. and Canada was an astonishing 91% in fiscal year 2021.

McDonald’s Corp. (MCD)

McDonald’s is one of a handful of stocks known as “dividend aristocrats,” as are some others on this list. To be a dividend aristocrat, a company must raise its dividend every year for at least 20 consecutive years. McDonald’s has actually raised its dividend 44 years in a row, every single year since it became a public company.

How do I start investing in the stock market as a beginner?

Most online brokers, like Robinhood and eToro, allow you to buy stocks without paying any sort of commission.