Do you prefer a more passive, long-term approach to investing that doesn't require constant monitoring and updating of your portfolio? That's fine. In fact, it's great. Investors employing a simpler "less is more" approach often end up outperforming their peers.
The key to success with such a strategy is just finding the right stocks to begin with. If you are just starting out as an investor but only have so much available to invest -- say $500 -- you want to start out with solid choices you know will do well so you can grow that initial investment. You also need to know these choices will be fine in the long run, and able to shrug off any short-term challenges.
With that as the backdrop, here's a rundown of five different stocks you can confidently invest $500 in right now and not worry about them too much for the next several years.
1. Procter & Gamble
You've heard of the company. And you're likely to also be a customer without even realizing it. Procter & Gamble (PG -0.78%) is parent to several popular brands of consumer goods, including Tide laundry detergent, Gillette razors, Luvs and Pampers diapers, Cascade dishwasher detergent, Bounty paper towels, and more.
Its products aren't just familiar, either. In market research outfit BrandSpark's most recent look at the market, Procter & Gamble boasted a leading 23 of the country's most trusted brand names; Tide alone won in five different laundry categories.
This is no small matter. See, although brand recognition alone doesn't inherently guarantee profitability, market dominance goes a long way in ensuring a leading brand remains a leading brand. Not only does Procter & Gamble enjoy all the advantages of scale, like relatively lower production and operating costs as well as sales leverage with retailers, but it also simply has more products to cross-sell. P&G can also afford to be one of the world's biggest advertisers.
Connect the dots. It's unlikely Procter & Gamble is going to be dethroned anytime soon, if ever.
2. Apple
Here's another company that doesn't need much of an introduction. Apple (AAPL -0.35%), of course, makes the world's single most popular smartphone -- the iPhone. Yes, Samsung technically sells more total smartphones, but in a variety of models and price ranges. Apple also generates far more smartphone revenue than any of its rivals due to the iPhone's premium pricing.
Loyalty to the iOS operating system powering iPhones is sky-high, too, with market research firm Consumer Intelligence Research Partners reporting that 94% of iOS users (most of them being iPhone users) plan on sticking with the operating system when it's time to upgrade their devices. Consumer Intelligence Research Partners adds that between early last year and early this year, 15% of iPhone purchases made within the United States were made by former users of Samsung's Android smartphones. Both measures are far stronger than Android's appeal and loyalty.
Although the iPhone is a powerhouse product accounting for more than half of the company's revenue, it's not the only reason to step into Apple for the long haul. The popular device is increasingly a means to an end, generating additional revenue by facilitating the sale of apps, music, and video entertainment. These digital services now account for around one-fourth of Apple's top line and even more of its bottom line.
Apps and subscriptions only fuel consumer loyalty to Apple's iOS digital ecosystem, of course. People are not only already familiar with the operating system, but they've already paid for many of the apps installed on previous versions of their smartphones.
3. Visa
This is yet another company you're more than familiar with. Visa (V -0.23%) is the world's biggest credit card middleman (outside of China, anyway), handling the purchase of $14.8 trillion worth of goods and services in its recently ended fiscal year. That's more than 259 billion total transactions from a crowd wielding more than 4 billion Visa credit and debit cards.
Visa's sheer reach is only half the reason to own the stock, however. The other half is the way consumer spending is evolving. Cash is slowly but surely going away, displaced by cards. The U.S. Federal Reserve reports that back in 2012, cash was used to handle 40% of purchases made within the United States. Now, that number has been dialed back to only 18%. During this time, debit and credit card usage has grown from 44% of transactions to 60%.
Yet, there's room remaining for both of these trends to continue.
This shift, of course, reflects the growing convenience of cards and the growing inconvenience of paper and coins. It's now common within the United States to purchase things like groceries or even pay your wireless phone bill with a credit card, and more so every day.
Visa may never be a high-growth stock. As long as sellers and buyers want to connect with one another, though, Visa's service will be a necessary one.
4. Adobe
You probably know the name as the developer of image-editing software Photoshop or the premier name in digital PDF (portable document file) solutions. And it still offers both.
However, Adobe (ADBE 0.87%) is so much more than Photoshop and PDFs. The company offers a full-blown suite of digital tools aimed at the business market. Stock photography, generative AI, 3D modeling, animation, web traffic analytics, e-commerce tools, targeted marketing, and digital data collection (and more) are all in its wheelhouse now.
That's not the evolution that makes Adobe such a worry-free investment, though. You can confidently pour at least a portion of your idle cash into it at this time because of the way it now offers its software to customers. While you can still purchase it outright on a one-time basis, most users now opt for the subscription-based, cloud-accessed versions of its tools. Not only are these tools always up to date and accessible from anywhere, but this model is also often more cost-effective for the end-user. It's good for Adobe and its investors, too, as recurring revenue is also predictable revenue.
To this end, Adobe's annualized recurring revenue run rate now stands at $14.6 billion, while $15.7 billion worth of this business is already lined up and waiting to be booked. For perspective, Adobe has done about $18.9 billion worth of business over the course of the past four quarters.
5. Coca-Cola
Last but not least, add Coca-Cola (KO) to your list of stocks you can confidently step into right now.
Like Adobe, Procter & Gamble, Apple, and Visa, the big draw here is once again the habitual, recurring purchase of its products -- all of them. Yes, there's its market-leading namesake cola. The company isn't just carbonated beverages, though. This is also the name behind Dasani water, Gold Peak tea, Minute Maid juice, and others. It's always got a beverage product to sell someone.
The key selling feature of Coca-Cola stock, however, is its dividend. The current dividend yield is a healthy 3.2%, but more than that, it's a dividend that's been raised every single year for the past 61 years.
Don't look for this streak to be snapped anytime soon, either. See, the beverage giant has spent the past several years selling its bottling operations back to local bottlers so it can better focus on what it does best. That's marketing and licensing its flavors and brand names. And it's very, very good at it; there's a reason brand names and their corresponding brand logos are among the most recognized in the world.
While this strategic shift means less net revenue, since profit margins on royalties are much higher than margins on bottling, The Coca-Cola Company is actually set to make more net income now than it was earning then.
KO Revenue (Quarterly) data by YCharts.
As the chart above also illustrates, Coca-Cola is making far more than enough money to continue funding its dividend. It's well-shielded should temporary turbulence strike.
