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The investment world has changed dramatically over recent years. Zero-commission trading and the ability to purchase fractional shares has opened up investing to everyone. Now, even those with just $1,000 to invest can pick and choose from among the most well-known companies in the world, owning stocks that used to be out of reach to the small investor.
But while nearly all stocks are now accessible, it doesn’t necessarily mean that all are good investment choices if you only have $1,000. Typically, you’ll want to pick well-established industry leaders to increase the chances that your first small investments will pay off. Here are some top options that might fit the bill, although you should always consult with a financial advisor before putting your hard-earned money at risk.
Apple (AAPL)
- Stock price as of Oct. 13, 2023: $178.85
Apple is the world’s most popular consumer products company. It’s also the largest company in the entire world in terms of market capitalization. These reasons alone make Apple worthy of consideration as an investment. But the stock has also been a consistent, long-term performer, and it’s become a bellwether of the market as a whole, as it comprises more than 7% of the value of the entire S&P 500 all by itself.
Microsoft (MSFT)
- Stock price as of Oct. 13, 2023: $327.73
Microsoft is still by far the market leader in terms of desktop operating systems, at 70%, but its moves into artificial intelligence-related areas have improved the outlook for the stock for years to come. The second-largest company in the S&P 500 — only slightly behind Apple — is a big investor in OpenAI, the creator of ChatGPT, and its cloud services business Azure is right behind Amazon Web Services in terms of market share.
Investing for Everyone
Microsoft also owns LinkedIn and Skype, among many other properties.
Berkshire Hathaway Class B Shares (BRK-B)
- Stock price as of Oct. 13, 2023: $345.09
Berkshire Hathaway is essentially the investment arm of the “Oracle of Omaha” Warren Buffett. With a long-term return well in excess of the S&P 500 index, many consider Buffett to be among the best investors of all time.
By picking up shares of Berkshire Hathaway, you not only get instant exposure to more than 50 holdings — in addition to Berkshire’s massive $147 billion cash hoard — you also get an invitation to the company’s annual shareholders’ meeting in Omaha, which is one of the highlights of the year for the financial media.
Amazon (AMZN)
- Stock price as of Oct. 13, 2023: $129.79
Amazon has grown from a simple online bookseller to the distributor of nearly anything in the world you could want, to nearly anywhere you want it. That alone might be a good reason to own the stock, but Amazon is also leveraging much of its future on artificial intelligence. The company’s cloud-based Amazon Web Services is on the cutting edge of that industry and should help the company expand in exciting ways going forward.
UnitedHealth Group (UNH)
- Stock price as of Oct. 13, 2023: $539.40
UnitedHealth Group is not only a great company in its own right, it can be a great diversifier from the tech-heavy portfolios that many investors have. UnitedHealth is the largest private health insurance in the United States, a clearly growing business, and returns a significant amount of capital to shareholders through buybacks and dividends.
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Coca-Cola (KO)
- Stock price as of Oct. 13, 2023: $52.89
Analysts have a strong buy rating on perennial winner Coca-Cola, with a 12-month price target about 28% above current levels. The slow but consistent grower pays a fat 3.48% dividend at current levels, and it has raised that dividend for an incredible 60 consecutive years, making it a great stock for income investors. While growth is slow at the venerable company, its operating profit margins are stellar, at nearly 30% of sales.
Honorable Mention: iShares Core S&P 500 ETF (IVV)
- Stock price as of Oct. 13, 2023: $433.41
The iShares Core S&P 500 ETF, as the name suggests, is actually an exchange-traded fund, not an individual stock. However, many financial advisors recommend that investors hold a core position in the S&P 500 index, something that IVV provides. With an annual expense ratio of just 0.03%, the ETF tracks the return of the S&P 500 index extremely closely.
Warren Buffett himself has said that for most investors, holding low-cost index funds is the best way to go. In 2017, he specifically told CNBC that investors should “consistently buy an S&P 500 low-cost index fund. Keep buying it through thick and thin, and especially through thin.”
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