Insider Monkey

11 Best Investments for Beginners

Fahad Saleem
15 min read

In This Article:

In this article, we will take a look at the 11 best investments for beginners. To see more such companies, go directly to 5 Best Investments for Beginners.

Investors remain skeptic on the economy’s ability to completely avoid a recession. Last month equities saw a selloff driven by persistent inflation, weak jobs report and China’s economic woes. Analysts believe the Fed’s battle against inflation still has a long way to go and recession could hit the economy in the first half of 2024. Some circles however voice a lot of optimism on the back of solid state of the consumer in the US. While inflation worried some segments of the market, the bulls say the latest uptick in inflation was caused by higher energy prices. Consumer spending in the US remains strong despite the hammering households have taken due to inflation over the past several months. The Chicago Board Options Exchange's CBOE Volatility Index (VIX), also known as the “fear gauge” of the Wall Street, recently fell to its lowest point since the pandemic. VIX shows the market’s expectation of volatility based on S&P 500 index options.

For beginner investors with low risk appetite and limited budgets, the current market environment may seem like a chaos. Inflation storm, meme stocks, recession warnings, loads of data to process and make sense of every week and never-ending news cycle that always sound like we are an inch away from doomsday – all of this can be overwhelming and oftentimes disheartening for an average investor. But long-term investors tend to stick to their principles and ignore short-term market movements. But what if you don’t have any investing principles? After all not everyone out there is Warren Buffett or Ray Dalio. One of the best ways to get clarity in this age of volatility is to learn from the masters of the game. As Guy Spier, the legendary value investor, author of The Education of a Value Investor and manager of Aquamarine fund, says:

"I read other managers’ letters. I look at the positions they own. The lists of portfolio securities that other managers own are very useful because it means the investment has already passed a very important filter. I think that whenever something in Seth Klarman’s portfolio is trading below the price that he paid for it, it is worthy of looking at, and at the same time, it performs another function. To get better at investing you want to study the moves of the masters.”

Best Investments for Beginners
Best Investments for Beginners

Photo by Austin Distel on Unsplash

Our Methodology

For this article we first listed all holdings of Vanguard Total Stock Market Index Fund ETF (NYSEARCA:VTI) and  Vanguard 500 Index Fund ETF (NYSEARCA:VOO). These two ETFs are considered ideal and safest choices for beginner investors by experts and Wall Street analysts. We sorted the holdings of these two funds by hedge fund sentiment, using Insider Monkey’s database of 910 hedge funds. We picked 11 stocks from the resultant dataset with the highest number of hedge fund investors. This way, we were able to pick the top investments in the stock market which are safe, less volatile and backed by smart money investors.

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