First Stock To Buy

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So where should a novice investor begin Opinions vary, but any \"starter stock\" should have certain characteristics, which may include low volatility, solid management, a sustainable dividend payment and an easily understood business model. Oh, and it should be profitable, too. The following nine portfolio starter stocks are proven industry leaders that check most of those boxes.

Unlike most blue-chip stocks, Berkshire Hathaway had a strong 2022. The stock easily outpaced the S&P 500, losing just 1.2% while the S&P 500 shed 19.4%. 2023 should be markedly better for Berkshire and its 92-year-old figurehead Warren Buffett. Insurance industry profits look promising for the year, which benefits Berkshire, as the company owns Geico and, following an October 2022 purchase, insurer Alleghany as well. \"Insurance could be a nice tailwind for Berkshire in 2023 if there are weaknesses elsewhere,\" noted Edward Jones analyst James Shanahan, who recently issued a \"buy\" rating on Berkshire Hathaway. Berkshire is also one of those hard-to-find stocks that consistently bests the benchmark S&P 500 over the long haul - it's done so over the last six months, as well as over the last one- and five-year periods.

It's no coincidence that Apple, with a 38% weighting, is easily the largest stock position in the Berkshire Hathaway portfolio. That begs the question: If Apple is good enough for Warren Buffett, shouldn't it be good enough for a brand-new portfolio If you're looking to early 2023 returns for an answer, you'll get a strong \"yes,\" as Apple shares surged 11.1% in January. In a tough economic environment, analysts expect Apple's fiscal first-quarter earnings to clock in at $1.94 per share, a year-over-year decline of about 8%. For the long haul, however, Apple is one of the strongest-performing stocks in the past three decades and is loaded with management talent and creative ingenuity. It should be a mainstay for any nascent investment portfolio.

As of Jan. 31, Microsoft's stock had lost about 19% over the past year. When you're looking for a \"starter stock,\" however, leave recency bias behind and focus on the fundamentals. For example, virtually every analyst covering MSFT has a \"buy\" rating on the stock. Morgan Stanley analyst Keith Weiss currently has a target price of $307 for MSFT, which closed at $247.81 on Jan. 31. Microsoft is also placing a big bet on artificial intelligence, with a $10 billion investment in ChatGPT maker OpenAI. MSFT hopes to accelerate AI breakthroughs, especially in the supercomputing and cloud computing marketplaces. Getting in front of the AI revolution should spur further growth in Microsoft stock over the long haul.

You don't build a great stock portfolio out of the gate without including some of the top consumer brands in the world. That's the case with Coca-Cola, which routinely outperforms its peers. At 58.5%, KO's trailing 12-month gross profit margin is high for the consumer goods industry, as is Coca-Cola's 28.9% trailing 12-month earnings before interest and taxes, or EBIT, margin. Coke does many things well as a consumer food and drink powerhouse. Meanwhile, KO has shown resiliency as it easily outperformed the benchmark S&P 500 in 2023, advancing 10.6% during a bear market. With a good dividend yield of 2.9% and a track record of delivering in good economic times and bad, Coca-Cola deserves a spot on your stock investment shelf.

AT&T looks like a robust and reliable stock for investors just getting their feet wet in the market. Its fourth-quarter numbers prove the point, with subscriber growth that topped consensus expectations. The telecom behemoth has slimmed down in the past 30 months, divesting its WarnerMedia unit via a merger with Discovery and spinning off DirecTV, which just lost the lucrative NFL Sunday Ticket to YouTube. Shedding its media subsidiary debt enables AT&T to focus on upgrading its core telecom business going forward.

AT&T saw its core wireless base expand in 2022, adding 2.9 million subscribers against only 201,000 for its chief rival, Verizon Communications Inc. (VZ). Overall, T's wireless revenues rose 8% in 2022 and the company expects a 4% wireless growth rate in 2023. That's good news for investors, who should see an improvement in T's already impressive 5.6% dividend yield. Low-volatility stocks with great dividends should be a mainstay of any starter stock portfolio, and AT&T certainly fits the bill here.

Bank of America is another low-volatility stock that should have a home in a starter stock portfolio built for the long term. In the near term, Oppenheimer analyst Chris Kotowski believes banks will be \"steadier than most think\" in 2023. BAC has also dropped the hammer on the digital banking front, with 73% of its verified digital users conducting their banking digitally via the Bank of America web portal or through its mobile app. Tack on a steady dividend payout of 2.5%, and BAC becomes a top financial industry selection for any beginning portfolio.

In my opinion, their massive reach, and ability to engage consumers all over the world, and of all ages, make Disney a solid buy-and-hold stock for beginners. Even with a pandemic that forced the shutdown of their amusement parks for the better part of a year, the company still found a way to make its investors happy: the launch of its Disney+ video-on-demand streaming service brought in revenue from more than 118Platforms Inc million subscribers (and counting!) and allowed Disney to use its video library and new content to make it a strong Netflix competitor.

The company also owns Instagram and WhatsApp. Together, their products and services have over 3.5 billion active users as of the first quarter of 2021. That means one out of every three people on the planet uses their platforms. Wow!

Personally, I think the Pinterest stock is a solid buy, and it could be a bargain right now. While their individual 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.

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.

Your online brokerage of choice might also ask if you want to open a margin account. With a margin account, the brokerage lends you money to buy stock. This lets experienced investors buy more shares of stock with less of their own money in exchange for some additional costs and much more risk.

Direct purchase plans are almost always administered by third parties, rather than the companies themselves. The two most common direct purchase plan administrators are ComputerShare and American Stock Transfer & Trust Company (AST). Both firms charge additional fees for direct purchase plans. In contrast, most online brokers charge zero commissions to buy and sell shares of stock.

Full-service brokers provide well-heeled clients with a broad variety of financial services, from retirement planning and tax preparation to estate planning. They also can help you buy stocks. The trouble is full-service brokers charge steep commissions compared to online brokers.

For wealthy individuals without a lot of extra time to stay on top of their complicated financial lives, full-service brokers offer special treatment as well as a high level of trust. If all you want to do is buy stocks, a direct purchase plan or an online brokerage is a better choice.

There are thousands of different publicly traded companies offering shares of stock on the market. That makes it daunting to decide which stocks to buy. One way to think about researching the stocks you want to buy is to adopt a well-thought out strategy, like buying growth stocks or buying a portfolio of dividend stocks.

Whichever strategy you choose, finding the stocks you want to buy can still be challenging. Stock screeners help you narrow down your list of potential stocks to buy and offer an endless range of filters to screen out all the companies that do not meet your parameters. Nearly all online brokerage accounts offer stock screeners, and there are more than a few free versions available online.

With a stock screener, you can filter for small-cap stocks or large-cap stocks or view lists of companies with declining share prices and stocks that are at all-time highs. They also generally let you search for stocks by industry or market sector. Filtering by P/E ratio is a great way to find shares that are overpriced or underpriced.

If you do decide to give your broker the sell order, be sure you understand the tax consequences first. If the stock price has gone up since when you first bought it, you may have to pay capital gains taxes. Gains on shares you owned for a year or less are subject to the higher ordinary income tax rate, up to 37%, depending on your income. Shares sold after more than a year get taxed at the lower long-term capital gains rate of 0% to 20% in 2020.

One solution is to invest in stock index funds and ETFs. These often have low investment minimums (and ETFs are purchased for a share price that could be lower still), and some brokers, like Fidelity and Charles Schwab, offer index funds with no minimum at all.

In our view, the best stock market investments are often low-cost mutual funds, like index funds and ETFs. By purchasing these instead of individual stocks, you can buy a big chunk of the stock market in one transaction.

Investing in stocks will allow your money to grow and outpace inflation over time. As your goal gets closer, you can slowly start to dial back your stock allocation and add in more bonds, which are generally safer investments.

While stocks are great for many beginner investors, the \"trading\" part of this proposition is probably not. A buy-and-hold strategy using stock mut