Invest in Three Straightforward Shares with a $500 Budget Immediately
Over the past 19 months, Wall Street's bulls have reigned supreme. The U.S. economy's continued growth, along with the rise of AI and stock-split mania, have propelled the Dow Jones, S&P 500, and Nasdaq to multiple record-breaking highs. Yet, investments naturally face corrections, making downturns an opportunity for long-term investors to capitalize.
Recent dips in the Dow, S&P 500, and Nasdaq Composite by 1.6%, 3.6%, and 6.9% respectively, highlight these inevitable corrections. However, history has shown that every market correction is eventually wiped out by a subsequent bull market rally.
Great news for beginner investors! With most online brokers eliminating minimum deposit requirements and slashing commission fees for common stock trades on major U.S. exchanges, starting with a modest $500 can be a fantastic investment opportunity.
Introducing three stock picks that are no-brainer buys for new investors:
NextEra Energy
Topping our list is America's largest electric utility, NextEra Energy. The sector may have stumbled in the past due to the Fed's rate-hiking cycle, but declining interest rates and the company's focus on innovative renewable energy sources are set to transform NextEra's future.
Did you know that in the last 5 years, NextEra Energy has consistently delivered median adjusted annual earnings per share growth of 7%? And barring an economic collapse, the company's expected to generate 10% annualized dividend growth through 2026!
With 72 gigawatts of operating capacity, almost half devoted to renewable energy sources such as wind and solar, no other electric utility successfully generates more clean-energy power. Considering its strategic focus on renewables, lower interest rates, and robust cash flow generation, nextEra Energy is well-positioned to transition to a greener future.
Starbucks
A well-established brand with a loyal customer base, Starbucks has already shown a capacity to recover from setbacks in the past.
Starbucks is home to 32.8 million active U.S. Rewards Members, who not only appreciate free drinks or food items but tend to purchase more frequently and use mobile ordering. Moreover, the company's innovative capacity has resulted in significant improvements like video in drive-thru ordering boards and new food products catering to the lunch crowd – driving high-margin sales.
Despite a recent 40% slump in stock prices, Starbucks is currently trading at less than 19 times forward-year EPS, a significant discount to its previous average. Historically, Starbucks has demonstrated its ability to thrive in the face of adversity.
Intel
Intel may have struggled to compete with Nvidia in AI-accelerated data centers, but that doesn't mean it's time to abandon it. Legacy semiconductor industry heavyweight, Intel, is still worth investing in.
Intel is investing in semiconductor manufacturing, building two new fabs at TSMC Arizona, leveraging the most advanced semiconductor process technology in the US. What's more, the company has secured significant government funding as part of the CHIPS and Science Act.
Albeit operating in a volatile market, Intel boasts a robust network of clients in various sectors, thereby offering a diversified revenue stream.
Investing in these three stocks with $500 can be a meaningful step towards building a solid and long-term investment portfolio. Keep in mind that diversification is always important to manage risk. Happy investing!
After observing recent market corrections, investing in stocks like NextEra Energy, Starbucks, and Intel can be a smart move for beginners with minimal funds. With the removal of minimum deposit requirements and reduced commission fees, investing $500 can open up opportunities for long-term gains.
NextEra Energy's focus on renewable energy sources and substantial clean-energy power generation, along with its strong financial position and dividend growth potential, make it an attractive investment option in the changing energy landscape.