Most New Investors Pick the Wrong Stocks First. Here's What I'd Buy Instead.

New investors often make the mistake of investing in stocks based on hype rather than sound investment principles. This can lead to poor performance and missed opportunities. Instead of jumping on the bandwagon of a few "revolutionary" stocks, it is better to adopt a more measured approach to investing. One way to do this is by investing in broad market indices like the S&P 500 through ETFs such as SPY or VOO.

These ETFs provide a solid foundation for long-term growth, allowing investors to benefit from the overall performance of the market over time. Once the core index investment is in place, it is time to look at individual stocks that have a clear and stable business model. Qualcomm, for example, is making strides in the artificial intelligence data center processing market, with its processors excelling at inference tasks.

However, its stock performance has been inconsistent due to uncertainty surrounding its role in the AI landscape. BlackRock, on the other hand, is a stable investment that manages a vast array of exchange-traded funds, generating recurring revenue and dividend payments. Despite its recent underperformance, Walmart remains a compelling investment opportunity due to its extensive reach and potential for growth.

Finally, Roku is well-positioned to thrive in the streaming industry, offering the platform and devices needed to deliver content to subscribers. Its revenue has been growing steadily, even as the streaming market becomes more saturated. In summary, new investors should avoid chasing after the latest buzzworthy stocks and instead focus on building a solid foundation with broad market ETFs.

Once this base is established, individual stocks like Qualcomm, BlackRock, Walmart, and Roku can be added to the portfolio for further diversification and growth potential.