gand starting out as an investor can be a bit daunting. Everything is moving fast these days, and so many people seem to have a better understanding of how things work. It’s easy to justify staying on the sidelines.
Don’t let all the noise put you off, though. Much of what you hear is just that: noise that doesn’t really matter. A little common sense and patience can go a long way, and it is very possible to win while you learn.
To that end, here’s a look at three good stocks that even the most inexperienced investors can step in and keep an eye on. Their businesses (or goals) are simple and their success is clearly defined.
1. Procter & Gamble
You’ve heard of the name. You probably even know Procter & Gamble (NYSE: PG) makes a bunch of products that we know and buy over and over again, often without a second thought. What you might not realize, however, is how deep and wide the reach of this business is. P&G is the name behind Pampers Diapers, Tide Laundry Detergent, Bounty Towels, Gillette Razors, Crest Toothpaste, Pepto-Bismol, and more.
No one can claim that these product lines are interesting or that they market themselves. Procter & Gamble has yet to market these brands profitably, and as the biggest name in consumer goods for a long, long time, has perfected the art of connecting with consumers.
It also enjoys one of the largest marketing budgets in the world, allowing it to make its way into the hearts and minds of consumers. Promotional spending in the previous fiscal year was $ 11.5 billion, according to Ad age, and this year’s is comparable to that number.
Image source: Getty Images.
The benefit for novice investors is the straightforward way the business operates. Procter & Gamble must pay the costs of manufacturing its products and must sell these products at prices above that cost while remaining price competitive. Soaring inflation is making it more difficult than usual right now. But you don’t have to worry about surprises with input costs and pricing power changing quarter to quarter.
2. Walt Disney
Like Procter & Gamble, Walt disney (NYSE: DIS) is a household name. Unlike P&G, however, Disney’s business mix isn’t that straightforward. Movies, amusement park, television (cable as well as network broadcasting), licensing and streaming are all in her wheelhouse.
Some of these lines reinforce each other, but some potentially cannibalize others. The availability of new releases through the Disney + platform, for example, may have drawn new users to the streaming service, but may also have prevented people from entering theaters. And the movie industry is hit and miss and profitable, while theme parks are highly vulnerable to economic ebb and flow.
Nonetheless, this is a company with a long history of success, even with occasional headwinds.
It is ultimately the result of a well-loved brand name and brilliant branding effort. Its cinematic franchises like that of Marvel Avengers Where Star wars Where Frozen feature well-crafted, vibrant stories that come to life in its parks as well as in high-quality licensed toys.
These tried-and-true movie franchises are extended and extended to Disney +, with episodic series like The Mandalorian Where Loki. While the company manages a bunch of seemingly disparate divisions, most of them work pretty well together. No other name can do it as well as Disney.
Specifically, no other company is able to push its revenues from $ 38 billion in 2010 to $ 65 billion in the previous year, like Walt Disney did.
3. SPDR S&P 500 ETF Trust
Finally, if you are a beginner, rather than trying to select a few of the best stocks in the market at the right time, connect with the wider market with an instrument like the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).
As the name suggests, a stake in this exchange-traded fund is 500 small pieces of all the stocks that make up the S&P 500. The catch: you can only buy and sell this basket in its entirety. This is undoubtedly a good thing. As seasoned traders can attest, beating the market is hard to do.
It’s so difficult, in fact, that even most professional stock pickers can’t do it. Standard & Poor’s reports that between 2010 and 2020, 77% of large caps mutual fund The S&P 500 underperformed. The reason is simple but frightening: The things that even professionals do in an attempt to outperform the market will more often than not hurt than they help. Similarly, investors who are content to ride the long-term bullish wave of the broad market without opposing it typically outperform their peers.
But do you still want to choose individual stocks? Try this reasonable compromise: create an index fund like the SPDR S&P 500 ETF Trust most of your portfolio and add individual names around that long-term holding.
10 stocks we prefer over Procter & Gamble
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