Allocating a reasonable portion of investment portfolios to stocks is a great way to build long-term wealth. Yet searching for thousands of stocks amid today’s extreme volatility and uncertainty can overwhelm a new investor.
As beginners, newbies can consider buying stocks of well-known and established companies that they are familiar with instead of betting on speculative stocks. For example, legendary investor Warren Buffett would only buy a stock if he seen “what they’re going to look like in 5, 10, 20 years.”
Meanwhile, investing in a diversified portfolio of low-cost index exchange-traded funds (ETFs) has also proven easy to generate reliable returns in the stock market.
With that information, here are five stocks and two ETFs to buy for those looking to start an investment portfolio now.
|QQQE||Direction Nasdaq 100||$67.44|
|RER||Invesco S&P 500||$139.82|
Stocks for Beginners: BP (BP)
The first on today’s list is based in London BP (NYSE:BP), one of the largest companies active in the integrated energy sector, including oil, gas, low-carbon energy and renewable energy.
The first quarter of BP (Q1) results released in May showed a loss of $20.3 billion, mainly due to a $25.5 billion write-down following the exit of Rosneft, a Russian oil and gas company.
During the quarter, the energy giant reduced its net debt to $27.5 billion and generated a cash surplus of $4.1 billion. Meanwhile, management plans to increase its quarterly share buybacks to $2.5 billion before the end of the second quarter of 2022.
In June, BP agreed to acquire a 40.5% stake and operate the Asian Renewable Energy Hub in Western Australia. The large-scale project could be one of the largest green hydrogen hubs in the world.
Driven by soaring oil prices, BP stock has recently risen more than 8% since January. Additionally, the current price has supported a dividend yield of 4.57%.
Next is Coca Cola (NYSE:KO), one of the largest soft drink companies with a product portfolio of 200 brands sold in more than 200 countries worldwide.
In mid-June, Brown Forman Corporation (NYSE:BFA) (NYSE:BFB) and Coca-Cola announcement a global relationship to launch the Jack & Coke cocktail as a branded ready-to-drink premixed cocktail option. The initial debut is scheduled for late 2022 in Mexico.
After hitting a 52-week high in late April, knockout action has been under pressure. Still, shares are up 6.4% year-to-date (YTD). The current price supports a dividend yield of 2.8%.
Direxion NASDAQ-100 Equal Weight Index ETF (QQQE)
Our third choice for today is an ETF, namely the Direxion NASDAQ-100 Equal Weight Index Stocks (NYSEARC:QQQE). This fund helps manage risk in investment portfolios by providing greater diversification and equal weight exposure to the 100 largest non-financial stocks listed on the Nasdaq.
QQQE tracks the Nasdaq 100 Equal Weighted Index, which is rebalanced quarterly. The ETF started its activities in March 2012.
Both the index and the fund are heavily weighted towards information technology (50.3%). This is followed by consumer discretionary (17%), communication services (17%), healthcare (5.9%) and consumer staples (5.5%).
The top 10 stocks represent approximately 10% of approximately $700 million in net assets. Cloud native data specialist Datadog (NASDAQ:DDOG); independent identity provider Okta (NASDAQ:OKTA); security-as-a-service company Z-scale (NASDAQ:SZ); E-commerce name based in Uruguay Mercadolibre (NASDAQ:MELI); and electric vehicle company Lucid Group (NASDAQ:LCID) dominate the names in the fund’s portfolio.
The QQQE has recently fallen around 22% since the start of the year and hit a 52-week low on June 16. In comparison, the Nasdaq 100 the index has fallen 25.8% since January. Readers might put the fund on their radar screen to buy the dips in many good tech stocks for added diversification.
Global energy giant based in Italy Eni (NYSE:E) is involved in the exploration, production and distribution of gas, liquefied natural gas, petroleum refining and petrochemicals.
Management issued Q1 results on April 29. Total turnover reached 32.5 billion euros, up 120% compared to the same period of the previous year. Adjusted EBIT jumped 300% year-on-year to EUR 5.2 billion. Adjusted earnings were 91 euro cents per diluted share. Cash and cash equivalents amounted to 13.5 billion euros, compared to 8.5 billion euros in the first quarter of last year. Free cash flow amounted to 953 million euros.
On June 19, Eni was selected as an international partner in the world’s largest LNG project to increase Qatar’s LNG export capacity from 77 to 110 million tonnes per year.
Despite tailwinds in the energy sector, Eni shares have recently fallen more than 25% from their peak on March 2 and 12.6% since January. Still, it was paying a hefty dividend of 7.92%.
Invesco S&P 500 Equal Weight ETF (RSP)
The Invesco S&P 500 Equal Weight ETF (NYSEARC:RER) invests in all shares of the S&P500 and weight them equally. As such, it offers an attractive option for diversified exposure to large-cap stocks.
The fund began trading in April 2003 and tracks the S&P 500 Equal Weight Index. It currently has a basket of 505 stocks, of which approximately 44% are large-cap companies and 55.5% are mid-cap companies.
In terms of sector allocations, we see information technology (15.3%), industrials (14%), financials (13.5%), healthcare (13.1%) and consumer discretionary (11.6%).
The top 10 holdings represent 2.5% of the $29.8 billion in net assets. Major names include Invesco Short-Term Investments Trust Government and Agency Institutional Portfolio (NASDAQ:AGPXX); fedex (NYSE:FDX); self-managed real estate investment company Duke Real Estate (NYSE:DRE); and two global biotech names Vertex Pharmaceuticals (NASDAQ:VRTX) and Modern (NASDAQ:mRNA).
The RSP has recently fallen by more than 15% since the start of the year and by 8.5% over the past 12 months. The ETF hit a 52-week low on June 17.
Meanwhile, its front P/E and rear P/B ratios recently came in at 17.16x and 3.19x, respectively. Prospective investors may consider further researching the fund.
Global payment technology company Visa (NYSE:V) connects consumers, businesses, banks and governments through its operations in more than 200 countries.
On April 26, Visa released Q2 FY22 financial. Revenue increased 25% year-on-year to $7.2 billion. Non-GAAP net income was $3.8 billion or $1.79 per share, up 27% and 30% year-on-year, respectively. Cash and cash equivalents were $12.3 billion at the end of the quarter.
End of May, Visa announcement a partnership with Box, an integrated working capital platform. The partnership offers new payment capabilities for small businesses.
Visa stock has recently fallen 5.9% year-to-date and 14.0% over the past year. The dividend yield was 0.74%.
Forward P/E and P/S metrics are 23.09x and 15.62x, respectively. Meanwhile, analysts’ 12-month median price forecast for Visa shares stands at $270.
Walt Disney (DIS)
Last but not least is waltz disney (NYSE:SAY). The leading family entertainment and media company operates in multiple segments, including Disney Parks, Experiences and Products; Disney Media & Entertainment Distribution; and four content groups – Studios, General Entertainment, Sports and International.
Management reported Q2 financial results on May 11. Revenue of $19.25 billion represented year-over-year growth of 23%. Diluted EPS was $1.08, up 37% from $0.79 in the prior year quarter. Free cash flow was $686 million.
The entertainment powerhouse added 7.9 million new streaming subscribers in the second quarter, reaching a total of 137.7 million.
In mid-June, Disney added Johnson & Wales University to its Disney Aspire Educational Investment and Career Development Program.
Despite higher-than-expected subscriber growth, DIS stock hit a 52-week low on June 22. It has fallen by more than 37% since the start of the year.
As of the date of publication, Tezcan Gecgil, Ph.D., had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.