If you are new to investing, it can be a daunting task to take that first step and invest your money. With thousands of stocks and investment options out there, the big question is — where do you start? As with any endeavor, it takes time to understand the markets, the industries, and the companies that you invest in. Even long-time investors learn something new almost every day because markets are constantly evolving and changing.
While the markets are complex, that shouldn’t preclude anyone from investing and being successful at it from the jump — if you know where to start. Here are three starter investments you can’t go wrong with.
1. Microsoft: The tech giant, more accessible through fractional shares
If you are new to investing, chances are you probably don’t want to start off investing thousands upon thousands of dollars in a stock. You may not have that much to invest, or you may be reluctant to sink too much into something you are just starting to learn about. A better strategy might be to start with a manageable initial investment and then add to it monthly or regularly over time.
However, an issue for many people is not being able to invest in a lot of blue-chip stocks because their per-share price may seem too high. A survey by GoBankingRates said that 55% of people don’t invest because they don’t think they earn enough money to do so.
However, you can invest in these large blue-chip names through fractional shares investing, which is available through online brokers. It simply allows you to invest in a stock by dollar amount as opposed to shares. If you only had $250 to invest initially, you could invest in one of the greatest companies on earth, Microsoft (NASDAQ:MSFT). Microsoft is currently trading at around $340 per share as of Dec. 28, and over the last 10 years, it has posted an average annual return of 29.3%.
Microsoft is the second-largest company in the world by market capitalization, and its annual earnings have climbed about 10% annually over the last 10 years to $176 billion as of Sept. 30, 2021. Over the last few years, it has continued to diversify its revenue stream, led by its cloud computing business, which is its fastest-growing.
This year, Microsoft announced plans to acquire Nuance Communications, an artificial intelligence company, to bolster its cloud computing business, and Xandr, a digital ad technology firm that it may use with various properties, including the search engine Bing.
This tech giant has been a dominant player for 40 years and will likely continue to be one for many more years to come.