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Top Stocks To Buy For Beginners

Investing in the stock market today could be a great way to grow your wealth. But where do we start? To begin with, you might be better off investing in blue-chips stocks that are less volatile. What about penny stocks, you might ask. Well, a small movement in penny stocks could translate into big gains, but those gains could also turn into big losses overnight if we are not careful. So, unless you are willing to stomach such big swings, you might be better off sticking with well-known companies for a start.

top stocks to buy for beginners

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Admittedly, choosing the right stocks to invest in can be a time-consuming endeavor. This is true even for some of the most seasoned investors. If you are new to the stock market, buying companies that you are familiar with maybe a good place to start. It would be beneficial to have an idea of how the companies make money. Besides, picking stocks with strong balance sheets and stellar growth prospects could increase your chances of success.

Although the stock market is tumultuous at the moment, it is always a good idea to pick up quality stocks that are trading at meaningful discounts. Beginners with little money who want to jump into investing can look into firms like AT&T Inc. (NYSE:T), Uber Technologies, Inc. (NYSE:UBER), and CSX Corporation (NASDAQ:CSX) for a balanced portfolio.

Lucid Group, Inc. (NASDAQ:LCID) is a California-based technology and automotive company that designs, engineers, and builds electric vehicles, EV powertrains, and battery systems. Lucid Group, Inc. (NASDAQ:LCID) built 2,282 vehicles during Q3 2022 at its Arizona manufacturing facility, more than tripling the number produced in the second quarter. The company delivered 1,398 vehicles during the same period. Chinese President Xi Jinping's latest support for EVs and technology is being interpreted by analysts as positive for the sector. Lucid Group, Inc. (NASDAQ:LCID) stock also gained 8.50% on October 17 as a result. It is one of the best beginner stocks to invest in.

PPL Corporation (NYSE:PPL) is a Pennsylvania-based utility holding company, delivering electricity and natural gas in the United States and the United Kingdom. On October 24, PPL Corporation (NYSE:PPL) and Belgium's Elia Group announced a collaboration agreement to develop and operate transmission assets to integrate future offshore wind farms to the onshore grid in New England. PPL TransLink and WindGrid, the subsidiaries of the companies, have partnered to combine their expertise to deliver innovative transmission solutions. PPL Corporation (NYSE:PPL) is one of the best beginner stocks to invest in.

Dropbox, Inc. (NASDAQ:DBX) was incorporated in 2007 and is headquartered in San Francisco, California. The company provides a content collaboration platform to individuals and enterprises worldwide. On September 12, KeyBanc analyst Thomas Blakey initiated coverage of Dropbox, Inc. (NASDAQ:DBX) with an Overweight rating and a $30 price target. Trends in digitization, collaboration, and security will drive revenue growth, while workflow and value-added services will potentially reduce churn, increase ARPU, and sustain profitable growth for Dropbox, Inc. (NASDAQ:DBX), the analyst told investors. Dropbox, Inc. (NASDAQ:DBX) is one of the premier beginner stocks to watch.

Next on our list of the best beginner stocks is Energy Transfer LP (NYSE:ET), a Texas-based company providing natural gas transportation pipelines and natural gas storage facilities. On October 25, Energy Transfer LP (NYSE:ET) declared a $0.265 per share quarterly dividend, a 15.2% increase from its prior dividend of $0.230. The dividend is distributable on November 21, to shareholders of record on November 24. The forward yield was 8.78%. Future increases to the dividend distribution will be determined quarterly, and the company expects to return to an annual distribution of $1.22 per share, while balancing its leverage target, growth opportunities, and share buybacks.

Learning how to invest in stocks as a beginner can be a daunting task. There are thousands of securities to consider, and no particular strategy or approach guarantees success. However, if you retreat from the swirling chaos surrounding stock markets on a day-to-day basis, you could miss out on opportunities to grow your money over the long term.

What beginners want from their stock investments is pretty much the same as what everyone else wants: the best returns possible for as long as possible. However, where beginners tend to differ from veteran market watchers is in their ability to ride out the ups and downs inherent to owning a stock.

The sort of companies capable of posting huge gains are also ones capable of posting enormous losses. So, while you might eventually start branching out, beginners should likely avoid stocks with characteristics that can make them prone to big swings.

Certain industries can be notoriously fickle and are typically the first to take a plunge when the economy turns south. Things like consumer goods or cars seem like great stocks when times are good, but they tend to crater in bad markets.

While taking more risks to earn greater rewards is part of what investing in stocks is all about, easing yourself into the field may be essential to making your experience a positive one. To familiarize yourself with the process, consider sticking to conservative, relatively safe stocks and creating a portfolio of defensive stocks at the beginning.

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When seeking out the best stocks to buy now, investors will need to be brave and patient in regard to timing, as well as agile as the stock market eventually transitions from bear market to bull market. Go ahead and add resolute to the character traits you'll need this year, because many market strategists say you can't get from one market to the other without going through a recession first.

Given the uncertain, sometimes roiling backdrop for stocks, where should investors look when seeking out the best stocks to buy now? A popular piece of advice among Wall Street strategists now is to resist the bargain-basement appeal of the most beaten-up stocks and focus instead on high-quality shares. "Investors should avoid volatile names and be cautious on both deep-value and unprofitable growth companies," says Koesterich. "Instead, emphasize quality with a focus on earnings consistency and good profitability."

Now may be a good time to tilt toward value-oriented companies and small-cap stocks, both longtime underperformers that are showing signs of new life. Over the past five years, for example, the S&P 500 Value Index (opens in new tab) has returned 6.2% annualized, compared with 9.1% for the S&P 500 Growth Index (opens in new tab). Through early 2023, value has outperformed growth, with a 4.1% return compared to growth's 3.8% gain. "We would stick with value. These cycles last a while," says Ryan Detrick, chief market strategist at money management firm Carson Group (opens in new tab). Sectors typically grouped in the value style include energy, financials, industrials and materials.

So, with all of this in mind, here are 12 of the best stocks to buy now. The names featured here vary by size and industry and are not meant to compose a diversified portfolio. But all, for one reason or another, are well positioned to benefit from a transition to a bull market from a bear market in 2023.

Don't ignore the tenets of diversification and shun tech or the growthier side of the market completely when adjusting your portfolio to include the best stocks to buy now. Instead, take a barbell approach, says Tony DeSpirito, a managing director and portfolio manager at BlackRock (opens in new tab). This will allow you to scoop up value-focused shares at historically attractive relative price-to-earnings ratios (P/Es) and high-growth stocks at valuations that have come down from the stratosphere and are now at normal, if not yet underpriced, levels.

Take Advanced Micro Devices (AMD (opens in new tab), $76.61), a leading semiconductor manufacturer. Analysts have mixed ratings on one of Wall Street's best semiconductor stocks in part because an economic slowdown and neg