5 Best Investments for Beginners According to Experts

4. Invest in Big, Stable Companies

The market crash of 2022 and extreme volatility in stocks highlighted the importance of investing in stable, blue-chip companies. Many investment gurus and hedge funds time and again repeated the importance of staying away from risky, low-quality stocks and investing in big companies. Jim Cramer calls these companies “best of breed” stocks. The famous American investor and author Peter Lynch once said:

“Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.”

Bill Ackman of Pershing Square, Joel Greenblatt, Michael Price, and many other legendary investors, often talk about applying strict filters to choose stocks and going with a handful of high-quality companies. Bill Ackman’s portfolio has for years included only a few names but the fund has outperformed the broader market for several years. Ackman once said:

“Occasionally we’ve diverged … There’s a certain discipline that comes with investments and there always seems to be a countervailing quality that caused us to diverge, but in really each case we’ve either compromised on either business quality or complexity we’ve been harmed from an investment standpoint.”