So you have $2,000 (or $500 or $25,000) burning a hole in your pocket, and want to buy some stocks? That's great! First, be sure that you're ready to invest -- meaning that you're not saddled with high-interest rate debt (such as credit cards) and that you'll be investing money that you won't need for at least five years.
You should also have a decent understanding of how (and why) to invest in stocks. Once you do, you can start thinking about whether you want to opt for a simple index fund or two or if you want to carefully choose some individual stocks. Here are three portfolio contenders to consider.
1. MercadoLibre
MercadoLibre (MELI -0.45%) was a compelling investment nearly a year ago, and its stock is now down more than 50% from then. Is it only 50% as attractive as it was then? Not at all! Its shares are simply on sale.
If you're not familiar with it -- and many people aren't -- you might think of it as a bit of a cross between Amazon.com and PayPal. The company was founded in 1999, and it went public in 2007. Today, it has built what it calls "the largest online commerce ecosystem in Latin America" -- a region with a population of more than 660 million people (including the Caribbean).
So it's an e-commerce titan, operating in multiple populous countries -- and on top of that, it offers digital payment services via its Mercado Pago platform and even a Mercado Credit service. In its second quarter, the company posted 57% year-over-year revenue growth, on a currency-neutral basis, with Mercado Pago's total payment volume growing by 84% and items sold in the marketplace rising by 12% to 275 million.
2. Adobe
There's a good chance that you associate Adobe (ADBE -0.77%) with just one or two offerings, such as its image editing Photoshop service, its video editing Premiere Pro service, its vector graphics Illustrator software, and/or its Acrobat application, which facilitates the creation, editing, and sharing of Portable Document Format files -- otherwise known as PDFs.
There's much more to the company than that, though. For example, it has a growing Document Cloud segment, which saw its revenue grow 23% year over year in the third quarter. Its Document Cloud includes Adobe Scan (a leading scanning app) and Adobe Acrobat Sign, a digital signature service. Overall, Adobe's revenue grew 13% in the third quarter to a record $4.43 billion. These are solid growth rates, but they were lower than expected, which has not helped the stock price. On top of that, the company is paying some $20 billion for the design specialist Figma -- a price tag that many see as too high.
Those concerns are reflected in Adobe's shares, which were recently down a whopping 59% from their 52-week high. The company's recent forward-looking price-to-earnings (P/E) ratio was 18, about half of its five-year average. This is a great time to ask yourself whether you believe in the company's long-term potential. If you do, consider snapping up some shares -- or add Adobe to your watch list.
3. Berkshire Hathaway
Berkshire Hathaway (BRK.A -0.30%) (BRK.B -0.26%) is likely a familiar name to you -- especially if you're familiar with Warren Buffett, who has been at its helm for many decades. It's reasonable to wish you could invest like Buffett and achieve results like his. Most of us can't do that very well, but we can invest with Buffett by holding shares of his company. Do that, and your fortunes will rise and fall with his as you profit from the many businesses under Berkshire's roof.
Berkshire is a conglomerate, owning dozens of great companies in their entirety, such as GEICO, Benjamin Moore, See's Candies, Fruit of the Loom, Clayton Homes, the McLane trucking company, and the entire BNSF railroad. The company is also a major stockholder in some big companies. For instance, it owns roughly 20% of American Express, more than 9% of Coca-Cola, some 12.5% of Bank of America, and about 5.5% of Apple. Buffett has recently been snapping up shares of Occidental Petroleum, and Berkshire recently owned 29% of the company. Another company Berkshire has been buying many shares of is itself. Buffett likes to do so when he sees the stock as undervalued, and he has spent more than $60 billion buying back shares over the past few years.
This is a stock I've held for many years and one I intend to hang on to for a long time. Learn more about Buffett and Berkshire and see if you'd like to own it too.
No matter whether you have $2,000 or more or less to invest, these are still great companies to consider. Remember that you can always buy as little as a single share -- or hundreds of shares, depending on your budget.
