Q: I'm in college and want to start investing. What are some good stocks for young investors?
As a young investor just starting out, now is the time to be somewhat aggressive with your investments in order to take advantage of your long time horizon, but it's also the time to learn as much as you can.
For that reason, my hands-down favorite stock for new investors (of all ages) is Berkshire Hathaway (NYSE:BRK-B). The company has a winning and diversified business model that should allow it to continue to beat the market for decades to come. More importantly, by simply following along with how the company conducts its business (specifically, by reading Warren Buffett's letters to shareholders and watching the company's annual meetings), you'll learn many valuable lessons that will serve you for the rest of your life.
Apple (NASDAQ:AAPL) is another good choice for new investors, as the company makes exciting, popular products, but also has an extremely durable business model and several key competitive advantages. In fact, Berkshire Hathaway is one of Apple's largest shareholders.
Other favorites of mine for newer investors include time-tested, low-volatility companies such as Johnson & Johnson, Walt Disney, and Procter & Gamble.
Once you have formed rock-solid base to your portfolio with a few stocks like these, then it's OK to speculate a bit with companies that could be "the next big thing." Just make sure you start investing first with stocks whose price movements won't keep you awake at night.
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Matthew Frankel owns shares of Apple and Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Apple, Berkshire Hathaway (B shares), Johnson & Johnson, and Walt Disney. The Motley Fool has a disclosure policy.