Buying stocks is like owning a share of a company, so you need to make sure that you make the right choice. Here are the 10 best stocks to pick for beginners.
Getting started in stock trading seems to be pretty straightforward. All you need to do is buy shares from a company and hope that the price would move in line with your prediction. But in reality, stock trading is not actually that simple.
One of the first challenges beginners usually face in their early journey is choosing the right stocks to trade. Currently, there are literally thousands of stocks from publicly traded companies to choose from, so it's unsurprising to see that many traders don't know where to begin. The recent market downturn doesn't make it any easier, either. In this post, we'll help you figure out the best stock picks for beginners in 2023.
1. Alphabet
Alphabet Inc. (NASDAQ: GOOG) is an American-based multinational technology conglomerate that was created in 2015 and became the parent company of Google and its subsidiaries. About 99% of the company's revenue is generated by the tech titan Google, making it one of the world's biggest and most profitable companies at the moment. As you may have already known, Google offers a wide range of technology-related products, such as online advertising services, mobile operating systems, cloud services, hardware devices, and of course, the world's most popular web browser.
Alphabet stock is an excellent choice for beginners because of its extremely high network. Google is the most visited website in January 2023, attracting over 100 billion page visits in the span of one month. Every day, billions of people worldwide rely on Google browser for their daily searches. One of Google's subsidiaries, YouTube, also continues to thrive as the second most popular media platform in 2023 after Instagram.
2. Amazon
The tech giant Amazon (NASDAQ: AMZN) seems to be slowing down a bit after the layoff of approximately 18,000 employees as a part of the company's cost-cutting effort. The Amazon Web Services (AWS) segment also seems to be performing rather weakly, causing the company's net income to drop to $0.03 per diluted share from $1.39 in the prior year. But even so, such a temporary condition does not make traders stop buying Amazon stocks.
It is worth noting that Amazon is a rare company that has been successfully dominating two important sectors: Global web services and e-commerce. Despite the pressure in the near term, Amazon still offers the possibility of a turnaround thanks to e-commerce growth, cloud computing demand, and other factors that could help the tech giant regain its power. The company also has big potential to improve in other areas, such as grocery stores, healthcare, neighborhood market, and so on. So, if you are looking to grow your portfolio in the long term, Amazon is certainly a great option. The only downside is the steep price for small traders. Fortunately, there are now platforms that allow traders to buy fractional shares.
3. Apple Inc.
Apple Inc. (NASDAQ: AAPL) was the first company in the world that hit a $1 trillion market cap back in 2018. Two years later, the company broke another impressive record after becoming the first company to pass the 2 trillion dollar valuation mark, and even briefly hit $3 trillion in 2022 before dropping back shortly under the mark afterward. Its consistency at being on top makes it highly popular among stock traders and undoubtedly perfect for beginners.
Apple started out as a computer company, but it has grown a lot and now it's known as the top global smartphone manufacturer. Over the years, the company keeps on exploring new areas and expanding various service businesses, further proving that the company has the ability to always improve. Aside from the core services like Macs, iPhones, iPad, Apple Watch, and iTunes, Apple also added a bunch of exciting features such as Apple Pay, Apple TV, iCloud, and more.
4. Disney
The Walt Disney Company (NYSE: DIS) is a massive entertainment company that not only offers a magical experience at Disneyland but also incredible returns for worldwide traders and investors. In addition to famous theme parks, Disney is present in various brands and movie theaters. Companies now under the Disney umbrella are Pixar Animation Studios, Marvel, ESPN, Fox Entertainment Group, Lucasfilm (Star Wars), National Geographic, and many more.
While the COVID-19 pandemic hurt almost all theme parks and movie businesses around the world, Disney came up with the Disney+ streaming service, which has grown into one of the top streaming platforms in the world these days. It successfully gained 28 million subscribers in only three months since the app launch, far exceeding the company's expectations.
Today, Disney's theme park and movie businesses are fully back on track despite the looming concern of inflation and recession. In fact, Disney's revenue is much greater in comparison to the pre-pandemic era, thanks to the innovative deals and the massive success of Disney+. This simply shows that the company has a huge profit growth potential in the future as the newer features expand.
5. Meta Platforms
Meta Platforms (NASDAQ: META), formerly known as Facebook, remains the top player in the social media industry. Under the Meta Platforms umbrella, there are companies that run Instagram, WhatsApp, and Oculus; a virtual reality gaming company. In the fourth quarter of 2022, the company announced that around 3.74 billion people were using at least one of their main services each month. That means, one in every three people in the world uses their services. Whether you like it or not, social media is nowhere near slowing down. If anything, it gets stronger every day, making the company's stock highly promising.
With such a massive user base, it's unsurprising that many traders and investors are eyeing Meta shares. Recently, the company has been stumbling upon a few hurdles from governments for some of its business practices, such as accusations of monopoly. But it's nothing like what Zuckerberg and his team have never encountered before.
6. Microsoft
Microsoft (NASDAQ: MSFT) may no longer be the biggest company in the world, but it is still accounted as the third largest stock in the US after Apple and Amazon. Despite its slight downturn, Microsoft remains relevant in the tech industry and continues to show growth in various areas. For instance, the company keeps making money from its Office productivity suite, Xbox gaming console, and Surface devices. Additionally, the company relies on cloud operations served by the Azure cloud platform.
Microsoft also showed interest in Artificial Intelligence by investing a good amount of $10 billion in ChatGPT maker OpenAI. Through AI breakthroughs, the company hopes to grow and expand further in the long term. This makes the company's stock quite worthwhile and good for beginners.
7. Netflix
Many traders have been flooding Wall Street to buy streaming stocks these days, thanks to the high popularity of streaming services, especially during the pandemic. In such a highly competitive space, Netflix (NASDAQ: NFLX) seems to be at the top and is usually what first comes to mind with its original content. In the fourth quarter of 2022, Netflix has 230.7 million subscribers worldwide, making it the biggest streaming platform in the world.
Over the years, Netflix has been producing thousands of original content on its platform, including some of the most recent famous titles like Stranger Things and Wednesday. The massive client base also gives Netflix robust competitive advantages. It allows them to understand their customers and create better content in the future. On top of it, the company's positive cash flows and global recognition could support their future businesses and ensure the company's stock stability as well.
8. Spotify
Spotify (NYSE: SPOT) is a giant music streaming platform that has been dominating the industry in recent years. In the fourth quarter of 2022, the company hit 195 million premium music subscribers, which is 13% higher than the previous year, despite the company's decision to leave the Russian market. To grow their business further, Spotify has been starting to diversify their products. In the last few years, Spotify has rebranded as a "global audio platform" that offers a range of audio content aside from music.
So far, most of these investments were allocated to podcasting. Spotify now owned several podcasting studios and distribution platforms and makes deals with popular shows. Today, there are more than 100 million songs and 5 million podcasts that you can listen to on the platform, including exclusive content with famous podcasters like Joe Rogan. While it's still too early to tell whether this method will work, Spotify believes that their effort will generate money in the long haul.
9. Tesla
Tesla (NASDAQ: TSLA) is the company that brought renewable technology mainstream and is one of the hottest stocks in the market right now. Aside from highly-efficient electric cars, the company is also known for its supercharging station and partial self-driving feature. With a market cap of around $400 million, Tesla has been crowned as the largest automaker company by value. As a result, many traditional automobile manufacturers are starting to develop their own electric and eco-friendly cars.
There is hardly a day without seeing the word Tesla or Elon Musk on social media. So, seeing the massive growth of the company, it wouldn't be surprising that Tesla stocks are highly popular among traders. The company has been showing a lot of promise and seems to remain popular in the upcoming future as well.
10. Zoom
Zoom (NASDAQ: ZM) got all the spotlight during the pandemic. Millions of people worldwide found this cloud-based video conferencing platform to be incredibly helpful and reliable to communicate with each other during the lockdown period. While the pandemic has slowed down a bit right now, the "work from home" concept seems to be here to stay. Nowadays, many workers say that they're doing it by choice instead of necessity.
Working from home is a relatively new experience for most workers that can do their job remotely and Zoom is very likely to be the center of it all. The software is very much needed in work or daily life environments, so it's clear the company has a lot of growth potential in the future. Investors hope that with such big success over the recent years, the company will be able to come up with new innovations and technological breakthroughs to boost their profit margins.
Conclusion
Choosing stocks can be easy once you know exactly what you're looking for. The basic idea is to invest in companies that you think will succeed in the future. In this case, it's highly recommended to pick stocks that have special competitive advantages that make them more likely to survive in the market.
For instance, Meta Platforms stocks are popular due to the network effect and big client base. The more people use their service, the more valuable the stock gets. On the other hand, companies like Netflix and Zoom are popular because they provide unique, valuable services at the right time.
With that being said, it's important to define your strategy and do complete research on the stock that you'd like to trade. Once you found the companies that fit your criteria and risk tolerance, you can buy the stocks with a brokerage account.
15 Comments
Mar 8 2023
How much money do I need to invest in stocks properly? I've heard that it's possible to buy fractional shares to save money, but I have no idea where to start.
Jul 3 2023
@Lewis: In my opinion, the amount of money required to invest in stocks properly can vary based on individual circumstances and goals. It's important to assess your own financial situation and determine how much you can comfortably allocate towards investments without jeopardizing your financial stability.
Fractional shares are an excellent option for those looking to invest with smaller amounts of money. They allow you to get started in the stock market with even a modest investment, providing an opportunity to participate in the potential growth of high-priced stocks without having to buy a full share.
To begin investing in fractional shares, I recommend researching and comparing different online brokerage platforms. Look for platforms that offer low fees, a user-friendly interface, and a wide range of investment options. This way, you can make the most of your investment while keeping costs under control.
Mar 10 2023
Is it a good idea to invest in several companies of the same industry like Tesla and Ferrari?
Mar 13 2023
What is penny stock and what are the pros and cons of investing in them?
Jun 26 2023
@Zachhary: Let me explain to you in simple terms dude. Penny stocks are low-priced stocks, often trading below $5 per share. Investing in them has pros and cons. The advantages include low entry cost, potential for high returns, and trading opportunities due to volatility. Additionally, they provide the chance to invest in small companies with growth potential. However, there are risks involved. Penny stocks are higher risk due to lower liquidity, limited regulation, and susceptibility to market manipulation. Their volatility can lead to significant losses. Moreover, the lack of transparency and limited market interest can make it challenging to sell shares. It is important to research thoroughly, understand the risks, and consider your investment goals and tolerance before venturing into penny stocks.
Mar 15 2023
I've been learning about forex trading in the past year and I've made some good trades on my trading account. Sadly, I somehow still find stock trading really hard to do. Not sure if I simply picked the wrong stocks or I was just out of luck but the results I got never met my expectations. But even so, I really want to invest in other assets aside from forex and stock seems to be the perfect option.
As far as I know, stock trading is more suitable for long-term trading and forex is good for both short and long term trading, right? This is quite concerning to me because I'm still pretty much clueless and I haven't learned much about fundamental analysis as well. Is this bad?
Mar 16 2023
Hey, I was once in your position too and now I trade both forex and stocks. Based on my experience, you need both technical analysis and fundamentals to make profits from stock trading. If you're planning to make long-term investments, then yes, you'll need to learn fundamental analysis to learn the intrinsic values of a stock. Start by analyzing the fundamentals of the stock company, like their financial statements, economic data, analyst reports, press releases, and such.
But please don't get me wrong. Stocks are not only good for long-term investments only, so you can use technical analysis to trade stocks in the short-term as well. Some traders even use the combination of both technical and fundamental analysis to make their investment decisions.
I suggest you learn the basics of both technical and fundamental analysis for stock trading, then you can decide to focus more on one method or stick with both. Hope it helps!
Mar 16 2023
I entered the stock market with a strong belief that the best way is to start investing in one stock and understand it thoroughly to make profit in the future. However, I've heard that it's even better to diversify your portfolio and invest in several stocks at once to minimize risks. What I want to know that is it worth it for beginners? To be honest, I'm not sure if I was skilled enough to manage multiple investments at the same time. For all I know, I might mess it all up by not focusing on any of them.
Looking forward to hearing some tips on this cause I don't know what to do.
Mar 16 2023
Hi, there. This is actually an interesting take on stock trading. In my opinion, it's good to start with one stock while learning the basics of stock trading. Once you get the hang of it, I think diversification would really help you generate better results. How so? Let's say you invest in an airline stock and the share price drops in the following day because of a high number of cancelled flights. In this case, your portfolio might drop in a concerning rate. You can avoid this by investing in, for instance, railway stocks, so that your portfolio won't be as heavily affected.
Mar 17 2023
I totally agree with Jimmy. Diversifying is highly important for stock traders as a part of the risk management system. Therefore, the goal is to balance your portfolio across various types of assets, instead of simply attempting to maximize gains by investing in big companies only.
There are several ways to diversify your portfolio. You can choose to invest in different stocks based on investment type, company size, location, or asset classes. Try to pick stocks that have a high chance to move in the opposite ways so they can hedge one another and reduce your risk. Once you find the right balance, you can preserve your wealth and make a stable income over the years.
Mar 22 2023
How often should I check my stock investments if I'm doing it for the long term?
Jun 7 2023
@Xavier: When it comes to keeping tabs on your stock investments for the long term, you don't have to be constantly glued to your screen like a hawk. It's all about finding the right balance between staying informed and not stressing yourself out unnecessarily. Since you're in it for the long haul, you can take a more relaxed approach to monitoring your investments.
Rather than checking on your stocks every single day or even every week, you can opt for a more periodic review. Consider checking in on your investments every few months or whenever there are significant company news or market changes that could potentially impact your holdings.
Remember, the goal of long-term investing is to focus on the big picture and not get caught up in the day-to-day market fluctuations. By taking a step back and giving your investments room to breathe, you allow them to grow and mature over time.
Mar 24 2023
Is it really worth it to invest in a small amount? How long should I wait for it to make considerable profits?
Jun 13 2023
@Randy: Investing in a small amount can be a smart move, especially if you're just starting out in the stock market. It's like dipping your toes in the water before taking the plunge. While you may not see huge profits right away, it's still worth it because you're gaining valuable experience and learning the ropes.
Now, let's talk about making those sweet, sweet profits. Here's the deal: it's hard to put a specific timeline on it. The stock market can be unpredictable, and there are no guarantees. Some stocks might take off like a rocket, while others might take their sweet time. So, it's important to have some patience and manage your expectations.
When it comes to stock picks, my friend, it's a jungle out there. It's like choosing the perfect flavor at an ice cream shop - everyone has different preferences. Do your research, consider your goals and risk tolerance, and maybe even seek advice from experts. Remember, diversifying your portfolio is like having different flavors in your ice cream cone. It helps spread the risk and increases your chances of finding winners.
So, keep your eyes peeled, do your homework, and remember that investing is a long-term game. It may take some time, but with a bit of luck and smart decision-making, you could be sippin' on profits in no time. Good luck out there, my investing amigo!
Jun 13 2023
@Randy: Investing in a small amount can be a smart move, especially if you're just starting out in the stock market. It's like dipping your toes in the water before taking the plunge. While you may not see huge profits right away, it's still worth it because you're gaining valuable experience and learning the ropes.
Now, let's talk about making those sweet, sweet profits. Here's the deal: it's hard to put a specific timeline on it. The stock market can be unpredictable, and there are no guarantees. Some stocks might take off like a rocket, while others might take their sweet time. So, it's important to have some patience and manage your expectations.
When it comes to stock picks, my friend, it's a jungle out there. It's like choosing the perfect flavor at an ice cream shop - everyone has different preferences. Do your research, consider your goals and risk tolerance, and maybe even seek advice from experts. Remember, diversifying your portfolio is like having different flavors in your ice cream cone. It helps spread the risk and increases your chances of finding winners.
So, keep your eyes peeled, do your homework, and remember that investing is a long-term game. It may take some time, but with a bit of luck and smart decision-making, you could be sippin' on profits in no time. Good luck out there, my investing amigo!