When you invest for the long term, it's always a great time to buy high-quality stocks that can deliver generous returns for many years. In this Backstage Pass segment, recorded Sept. 20, 2021, Fool contributor Rachel Warren shares her experience investing in the stock market for the very first time with fellow Fool contributor Brian Withers and discusses the overall investing thesis that informed her first 10 stock buys.
Brian Withers: Awesome. Awesome. Well, there's an exciting event that's happened in your life in the last couple of weeks: You just became an investor. So you've been writing for the Fool for almost two years, but you hadn't bought stocks yet. So, yeah, tell us a little bit about, sort of, how all this came about and kind of, where you put your money to start?
Rachel Warren: Absolutely. So just as kind of a bit of a background on me. I didn't really come from a finance world, as I mentioned. I didn't personally know a lot of people that were really invested in the stock market. So, in some ways, it was a new world to me. Before I started working for The Motley Fool, I thought, I think this is so complicated. I just don't know.
Then as I really learned and studied the kind of approach of long-term investing, I realized how much that really takes the guesswork out of it. Because, you know, if you're looking at companies that you're sort of putting in this buy-and-hold horizon of three to five years, it definitely narrows down the choices in the sense that there's still a lot of options, but not every company you're going to want to hold in your portfolio that long.
They don't all meet that really high-quality standard. So I realized investing, building a top-notch portfolio, it doesn't need to be complicated. You do your research, you buy companies that have kind of that true staying power. For me, like you said, I've been writing about stocks, really studying up on a lot of companies, specifically in the healthcare and tech sectors for a number of years now.
I felt like it was just finally time to take the plunge. I guess it goes to show there's no time horizon for when you're ready to buy your first stocks. It's important to know what you like, know the companies you're interested in, and what you're comfortable with. I started out with 10 stocks, spread across a variety of sectors. I bought -- should I just name the companies I bought?
Brian Withers: I posted it. We're going to talk about every one of those today. Just talk about why you picked those, I guess, a mix of the balance and certainly ones that you love.
Rachel Warren: Sure. I had several key principles that I personally followed when I bought my first 10 stocks. First and foremost, buying great companies that I knew I would want to hold on to for three to five years, preferably longer. The second benchmark I had was I personally would categorize myself as medium risk tolerance.
I really wanted to buy stocks that were in highly resilient industries that are doing well in a general sense, regardless of what market conditions are and throughout the highs and lows. Then the third thing is I really wanted to make sure I could build a diversified portfolio with those 10 starter stocks. So I kind of did that in two ways.
The first thing was I chose to invest an equal or near-equal amount of money in each of the 10 stocks that I bought. Some of which were very big names [laughs] that we all know. And then I also bought a mixture of growth, dividend, and value stocks, so I could put all these different catalysts in my portfolio, and primarily in the healthcare and tech sectors.
Brian Withers: Awesome. Awesome. Well, we're going to talk a little bit about every one of the 10 stocks. I think you nailed it from your investing philosophy and what you wanted to do. I think this is an awesome starting list. If any investors are interested, this would be a good group to certainly hold for the next five years.
