If you're just starting your journey as an investor, it can be intimidating to decide where to begin. There are several ways to dip your toes in the water; the important thing is to get started and make adjustments along the way if needed.
To help new investors on this adventure, I have selected five stocks that would make an excellent starter portfolio. They include Amazon (AMZN +2.02%), Walt Disney (DIS 0.68%), Airbnb (ABNB 0.15%), Procter & Gamble (PG 1.02%), and McDonald's (MCD 1.25%). These stocks represent a diverse set of businesses serving a diverse group of consumers around the world.
NASDAQ: AMZN
Key Data Points
Amazon has become an everything store
Amazon started as a small bookseller but has grown to sell everything from groceries to electronics. The business has grown revenue at a compound annual rate of 25.6% in the last decade while expanding profit margins.
AMZN Revenue (Annual) data by YCharts
Amazon gives the portfolio an international presence as well as several categories of revenue, including e-commerce, cloud computing, and advertising.
Disney has been delighting consumers for generations
The House of Mouse has been around for more than 100 years. In that time, it has developed a connection with its fans worldwide. Parents take their kids to Disneyland. Those kids, in turn, take their children for generations. That's possible because of the timeless quality of Disney's intellectual property. Mickey Mouse doesn't go out of style.
NYSE: DIS
Key Data Points
Fortunately for investors, Disney has turned this into an excellent business with revenue growing from $42 billion to $67 billion in the last decade.
Airbnb is a popular travel facilitator
Airbnb is quickly rising as one of the best-known travel companies worldwide. The company runs the platform, which brings together folks looking to travel with those looking to rent spaces. Airbnb is rebounding quickly as people plan to travel again after delaying trips at the pandemic's onset.
Indeed, Airbnb's sales jumped by 77.4% in 2021 and are off to a strong start in 2022. The worldwide hotel and resort industry generated a massive $1.5 trillion in revenue in 2019, so if Airbnb grows to take a meaningful share of that market, it could reward shareholders handsomely.
NASDAQ: ABNB
Key Data Points
P&G is a staple in many households
Procter & Gamble owns a portfolio of household products, including Tide laundry detergent, Crest toothpaste, and Pampers baby diapers. Critically, these are essential items that people use daily whether their incomes are rising or falling. Holding P&G in your portfolio gives it a defensive stock that can do well even during recessions.
Moreover, P&G is no slouch regarding revenue and operating income, generating $76 billion and $18 billion, respectively, in 2021.
McDonald's is expanding its reach
McDonald's needs no introduction. The iconic brand has been serving affordable, fast meals to families worldwide for years. The restaurant franchise is expanding its reach due to the innovation it was forced to implement during the pandemic. With its restaurants closed to in-person diners, McDonald's developed a robust mobile app where consumers can order food for pickup or delivery. That move boosted McDonald's earnings per share by 59% to record highs in 2021.
It's a great time to start investing
If you're new to investing, you may be unaware that the stock market has been crashing in 2022. The chart above shows what percentage each of the stocks mentioned is down off all-time highs. Without getting into the details of why the market is falling, I will say that stock market crashes have not been rare historical events.
The good news is that the market has bounced back to record highs after every crash. The recovery may take a few years, but patient investors are rewarded for buying during market crashes. So if you're looking to start investing, now is an excellent time to begin.
