Learning Resources

4 Good Stocks to Invest In for Beginners

22 Apr 2022

4 Good Stocks to Invest In for Beginners | VI

Did someone ask for a quick way to get rich overnight? Well, we can’t give you one.

Stocks won’t make you rich overnight. Your $1,000 investment in the stock market wouldn’t be $10,000 the next day… BUT give it time, and it might just give you such returns.

Investing as a beginner will never be that easy. How do I choose the right stock? How much should I invest? Which types of stocks are best for me?

With so many questions left unanswered, many of us beginners would begin our investing journey through trial and error, often losing much of our capital along the way.

Even after learning which stocks are best and how to choose the right stock, other factors such as volatility, risk tolerance, and diversification can only be learnt through experience.

See also: How to invest in stocks with little money

Fortunately, with so many stocks available, you can find a few that are far safer than the rest. While even stable stocks, which have long been regarded as the best stocks for beginners, pose risks of you losing money, you should focus on purchasing those that will limit risks while also providing you with the necessary exposure to the stock market.

Here’s a list of 4 good stocks to invest in for beginners.

4 beginner-friendly stocks

Remember that investing in these stocks, although considered good investments for beginners, does NOT guarantee investment success.

Ensure that you do a thorough analysis before making any investment decisions.

1. Coca-Cola (NYSE: KO)

4 Good Stocks to Invest In for Beginners | Coca-Cola | VI

Coca-Cola is a favourite stock of many investors and a beloved childhood drink for many of us. It's no surprise that the company always manages to earn a profit, even when things are tough.

However, during the pandemic, many of its businesses lost over half of their worth or were thrown into bankruptcy. Restaurants, which were its primary sources of revenue, were also losing ground as the pandemic stopped us from eating out.

Furthermore, as the world becomes increasingly aware of eating healthy, Coca-Cola faces a huge hurdle. Fewer people buy Coca-Cola, resulting in a significant impact on Coca-Cola sales.

Despite these obstacles, the company is still able to make a profit. Consumers returning to restaurants helped Coca-Cola increase revenue by 17% in 2021 after restrictions were lifted and gross profit increased by 19% although dividend payouts did not increase much. If you think this increase is little, you must take into account the fact that this is a company with almost a US$280 billion market cap.

Because Coca-Cola is one of the biggest drink and beverage companies, it is easy for them to develop a new product and introduce it into the market.

Today, the future might look a bit dull for the company, but its historical performance can give you a glimpse of whether there’s assurance that you’ll gain or lose money from this stock.

2. Verizon (NYSE: VZ)

4 Good Stocks to Invest In for Beginners | Verizon | VI

With a market cap of US$225 billion, Verizon operates in the telecommunication industry and is one of the most established and biggest firms in the United States.

During the pandemic, Verizon’s share price plummeted as investors flocked to technology and medical firms, leaving Verizon in the dust.

Yet, despite its competitors' struggles to stay afloat, Verizon has managed to boost sales and profit in the past few years. The company’s revenue climbed by 4% from 2020 to 2021, although it’s fair to say that the rise isn’t that significant.

The company has been directing the majority of its funds into the research and development of its 5G network, an investment that might pay off handsomely in the coming years if it can establish itself as the industry leader in this field.

Some of us are already purchasing new 5G-capable devices, indicating that the corporation is on the right track. So why waste money on a new phone when you can invest in the next big 5G company?

Likewise, Verizon is a dividend-paying stock. And if you’re a beginner, you can benefit from dividends while waiting for your investment returns from capital gains.

3. Teladoc Health (NYSE: TDOC)

4 Good Stocks to Invest In for Beginners | Teladoc | VI

Here's one you might not know about, especially if you don't see your doctor very often.

Teladoc Health, a company with a US$10 billion market cap, aims to keep patients out of the doctor's office, a concept that was already gaining attention before the pandemic. They offer a video-conference platform for healthcare clients to meet with their doctors.

Most businesses lost money during the pandemic, but Teladoc did not. Teladoc not only did not lose money this year, but their virtual visits more than doubled as a result of the pandemic.

You may think it's just a trend that will go away once it's safe to leave the house again. But if you think about it, why go to a doctor if you can just have virtual visits online? Many of us are discovering that we may meet many of our medical needs without ever leaving our homes.

Teladoc's sales increased by 86%, with gross earnings doubling. Teladoc is still a growing company in a developing market, so it's worth keeping an eye on.

4. Nike (NYSE: NKE)

4 Good Stocks to Invest In for Beginners | Nike | VI

Everybody knows, if not owns, a Nike. With a market cap of almost US$200 billion and yearly sales of almost US$30 billion per year, it is no exaggeration to say that Nike is the biggest sportswear brand in the world. Although it is not yet as big as Apple or Microsoft, as the population continues to grow, so will the demand for Nike’s products. 

However, due to supply interruptions and transportation challenges, Nike has had product shortages, and its stock may suffer short-term damage. On the other hand, the majority of us have transferred our buying habits to the internet, where we can buy directly from shops, increasing their margins and sales.

Last year, Nike had a 21% increase in revenue and a 30% increase in gross profit. Surprisingly, although it is a retail business and the pandemic should have caused the business to lose money, they are still able to increase its dividend payout by 11%.

It's also worth mentioning that as a retail investor, you should have a well-diversified portfolio, and adding a reliable dividend company like Nike to your holdings is a great way to do so.

Whether you're looking to enter the stock market or rebalance your portfolio to suit your investment strategy, the stocks mentioned above are the best stocks to invest in for beginners.

Nonetheless, you should never take an expert's advice at face value. The only tried-and-true strategy to make profitable long-term investments is to conduct your due research.

To find out how you as a beginner can generate higher returns in the stock market, join our free masterclass.

DISCLAIMER

This article and its contents are provided for information purposes only and do not constitute a recommendation to purchase or sell securities of any of the companies or investments herein described. It is not intended to amount to financial advice on which you should rely.

No representations, warranties, or guarantees, whether expressed or implied, made to the contents in the article is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

We, 8VI Global Pte Ltd, disclaim any responsibility for any liability, loss, or risk or otherwise, which is incurred as a consequence, directly or indirectly, from the use and application of any of the contents of the article.