Investing in the stock market could be a great way to increase your wealth in today’s time. But how do we begin when we are new to this? First, investing in blue-chips stocks might be a better option since they are less volatile, i.e., less prone to the fluctuation of the price at any given time. A blue-chip is a stock in a corporation holding a reputation for quality, reliability, and operating profitably during bull and bear markets.
You might wonder about penny stocks. Penny stocks are shares of small public firms that trade for less than five dollars per share. A slight movement in penny stocks could translate into significant gains, but those gains could also turn into huge losses overnight if we are not careful. So, rather than taking a risk for such big swings, it is feasible sticking with well-known companies at the beginning.
The year 2021 saw many new participants in the stock market, as many people started investing during the pandemic for the first time. While some people prefer trading stocks for a shorter period, others consider long-term investing. The stock market – on average – generates around a 10% annual return. While this may look convenient, not many people gain such returns.
Therefore, choosing the right stocks to invest in can be a time-consuming effort. At times this applies even to the most seasoned investors. If you are a novice to stocks, buying companies you know will be an excellent place to begin. It is always better to have an idea of how the companies make money. Furthermore, picking stocks with solid balance sheets and stellar growth prospects could increase your chances of success.
It’s true that unless you are a gifted stock picker, some of your stocks will lose money. That’s why it is crucial to diversify your investments so that gains in other stores may outweigh losses in the stock.
Before we get to the stocks, let’s concede the caution that choosing the best stocks in the stock market for you to buy depends massively on your financial situation.
Now let’s get to the list of the five best stocks to buy in 2021.
APPLE (APPLE INC)
Many investors want to hold a share of Apple Inc. It is not-so-surprising since the tech giant has been bringing big rewards to its shareholders. Apple Inc. is a global technology-based company that designs, manufactures, and sells smartphones, personal computers, tablets, wearables, and accessories. The company is the first trillion-dollar company in the world. Like the old times, Apple Inc. created a new record again this year by holding the first company’s rank to pass the 2 trillion dollar tag.
The company commenced its operations as a computer company, making The Macintosh. Today, it has become a premier smartphone manufacturer. Yet, the company is not resting on its honors. It is leveraging its vast active user base to grow its business services and wearables. Apple’s innovation and execution during these challenging pandemic times have proven that the company can crumble all storms. These are a few factors that compel beginners to invest in this company.
Microsoft Corporation is a technology-based company. It licenses, develops, and supports a range of software products, devices, and services. Once the most valuable company globally, Microsoft is to-date one of the top tech stocks in the stock market. The company that gave us the Office productivity suite continues to remain relevant in markets worldwide. With its Office productivity suite, the Xbox gaming console, and popular Surface devices, Microsoft has tons of ways to make money. Many companies’ cloud operations are built by its Azure cloud infrastructure platform, which serves as the foundation. Azure has a massive opportunity for growth ahead, making it a good candidate as a stock with a solid runway ahead.
AMAZON (AMAZON COM INC)
The world’s largest e-commerce company Amazon Inc. has been the favorite of Wall Street for the last two decades. The company is the industry leader in the e-commerce segment and the cloud industry while having outstanding market shares in other emerging trends such as video streaming. Amazon’s business fundamentals remain rock-solid despite somewhat turbulent trading in the stock in the past few weeks.
From its latest quarterly report, the company astounded its investors by posting significant gains. The only downside in the Amazon stock is that its price may be a bit too exorbitant for a few. Luckily, several platforms now allow purchases of fractional shares.
FACEBOOK (FACEBOOK INC)
Being the world’s largest social media firm, Facebook is one top tech stocks to invest in for huge potential gains. As Facebook has more than 2.7 billion active users, there is no shortage of viewers of digital ads on its platform. Three out of the six most popular social media platforms – WhatsApp, Instagram, and Facebook – belong to Facebook. Social Media Advertising is Facebook’s chief revenue driver. It is predicted that digital advertising sales could exceed $513 billion by 2023.
Moreover, the company is confident about its e-commerce vision. It plans to bring new features to WhatsApp, like allowing users to buy items directly from the chat app. The in-app shopping functionality is desirable in specific emerging markets, where WhatsApp has a solid user base. After considering the above factors, FB stock is an excellent stock for new investors.
BABA (ALIBABA GROUP HOLDINGS LTD)
Alibaba Group Holdings is China’s largest e-commerce business house. Many people know this company as the Amazon of China. Alibaba is the leading e-commerce company in the Asia Pacific region, and it is a leader in the cloud industry in the area. Besides, the company invested heavily in artificial intelligence (AI). It made good use of the company’s data and its subsidiaries – particularly Taobao and Tmall marketplaces – which gave it a competitive edge on optimizing its offerings. In the previous year, an announcement was made that Alibaba has the sixth-highest brand valuation in the world. Alibaba is the second Asian company to surpass a valuation of over USD 500 billion. What’s not to like about BABA stock when it benefits from all the growth drivers in the form of AI, e-commerce, and cloud computing?
Billionaire and legendary investor Warren Buffett advises people to buy and hold stocks for several decades instead of selling and repurchasing them constantly. Investing is feasible if you are starting with a small amount of money. It is more complicated than just selecting a suitable investment, and you have to be aware of the restrictions you face as an amateur investor. You’ll have to do your homework to find the minimum deposit requirements and then compare the data accordingly. Billionaire and legendary investor Warren Buffett advises people to buy and hold stocks for several decades instead of selling and repurchasing them constantly.