Investing in the stock market to successfully generate portfolio returns doesn't require some super special set of skills or secret knowledge. It requires research, patience, and time. In this segment of Backstage Pass, recorded on Sept. 20, 2021, Fool contributor Rachel Warren tells fellow Fool contributor Brian Withers why she chose to invest in household-name companies with established track records of growth when she bought her first 10 stocks.
10 stocks we like better than Johnson & Johnson
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Johnson & Johnson wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 17, 2021
Brian Withers: I just want us to stop there. I look at your list of stocks and there's a couple of things that stick out to me that I wanted you to respond to. One is, these are like no-brainer. I know when people talk about what's my first stock that I should invest in? Like, where do you shop? [laughs] What companies are you familiar with? The old, "buy what you know" thing.
But these are one, very widely held stocks and popular across The Fool. You could say, well, the growth has been, they're found already. They're not hidden gems anymore. Then the other thing is, I bet you, if I look at the five-year history of these, a lot of them are multibaggers.
Not only are you picking some ones that everybody realizes that these aren't hidden gems and the fact that they've run up. Did that bother you at all when you went to go buy these companies?
Rachel Warren: I think, for me, I think that there's this idea of sometimes among investors that you have to look for the newest hidden gem, and that's a great thing. There's nothing wrong with, you find those small cap companies early on, you invest, and it blows up your portfolio.
That's excellent. [laughs] For me, especially as a newer investor, I did want to go with established companies. I wanted to pick brands that I knew well. It's like a couple of the healthcare stocks we talked about earlier, Johnson & Johnson (JNJ 1.49%) and AbbVie (ABBV 1.06%).
Yes, they have grown a lot, but they also have so much history behind them and so much consistent growth that hasn't been in just the two-, three, five-year snapshot. That was something that was really big for me. With some of these stocks like in e-commerce, for example, that I feel like have grabbed investors' attention more in recent years.
I looked at, well, you have these industries that have already realized tremendous growth -- e-commerce -- but they are set to realize tremendous growth over the next 10 years alone. These are areas that are continuing to expand. More and more people are shopping online, People like the convenience of it. People like how easy it is. You don't have to stand around for hours hunting for things.
I think people value convenience more and more in today's world. I looked at some of those ones that have been maybe more hype surrounding them, and I felt that they were in industries that still have a lot of room left to grow. I think that and then given the quality of their businesses, I felt were good fits for my portfolio.
Brian Withers: It's certainly positive to look at a company's past history, and look at the growth and the management. If you've done well historically, that doesn't mean that it'll repeat itself but certainly, winners tend to keep on winning. I think that's how you built your first 10.
