Getting started in investing can be confusing and nerve-racking. As a new investor, the best thing you can do is start with the basics. High returns with low risk is the foundation on which you should build your portfolio. The allure of quick money and penny stocks can be tempting, but more often than not those lead to loss. Warren Buffett said, “invest in a business, don’t rent stocks.” Buy with a mindset on the long term.
Before You Begin:
While there are numerous resources available to provide an analysis of various stocks, you will want to start by investing in an area in which you have some knowledge. Before investing in a particular company, make sure you are considering more than the company’s current financial status. Does the company have staying power? Do they have a competitive advantage? Have they historically been consistently profitable? Do they benefit from barriers to entry or could any competition come along and snag their market share? One of the most underrated considerations you’ll want to include is whether or not the company is adaptable. The world moves at breakneck speed and change is occurring every second. Can the company your are wanting to invest in adapt to those changes to not only stay profitable, but grow?
Still not sure where to start? Consider the companies below as a jumping off point to build that strong foundation.
The providers of TurboTax and Quick Books have products that keep customers loyal and in turn, keeping the profits steady. Intuit is an example of a company that has reaped the financial benefits of its adaptability, keeping up with technology to make organizing personal and business finances easy and accessible.
This retail giant is the epitome of having a staying power, adaptability and benefiting from barriers to entry. While opening an online business is easier than ever, offering the benefits of Amazon (such as Amazon Prime) is not something that can be easily obtained, even by established businesses. Amazon has a loyal following and stays on top of changes in trends and technology, helping them remain highly adaptable.
Visa is as well-known as any other company in America. It has a huge market share and the barriers to entry are enormous. Visa’s financial performance has shown steady growth and profitability. Because we now live in a global economy, it is no surprise that plastic is the preferred payment method of today.
Although stocks are the most common type of investments people make, there are other options to choose from when it comes to investing your money. One of these options is container investing. Container investing involves purchasing a container and having an external company manage and lease the containers to merchants. The benefit of investing in a container as opposed to a stock is financial stability. Unlike stocks, container’s do not fluctuate in value and you will never lose your entire investment.
Jacques Piccard is the Co-Founder and managing director of Davenport Laroche.