The 2 Best Stocks To Buy In 2020


We all know that we should be investing our money so we can grow our wealth for the future. It has become easier than ever to jump-start your investments with commission-free brokers such as Robinhood and TDAmeritrade that make it extremely simple to invest straight from your phone. The golden question remains: What stocks should I buy?

You may be tempted to throw your money any well-known stock such as Apple or Amazon. Or maybe you've done some research and have your eye on an emerging small company that you think will double or triple in value in the coming years! Well the reality is that over 90% of investors tend to under-preform compared to the overall market. Don't let this discourage you. Even most mutual funds run by "professionals" on Wall Street are not able to beat the overall market. Only a measly 8% of these "professionals" were able to consistently beat the market over the last 15 years. 

Simply investing in the overall market sounds like a good idea at this point, right? But how do you do that? If you've ever heard about the S&P 500 or the Dow Jones Industrial Average, these are exactly it! These are called stock indices, which are basically a collection of the top preforming stocks bundled into one package. When you buy an index fund, you are essentially putting your money into all these companies at once and are investing into the overall market. For example, the S&P 500 has had an average return of 9.8% per year for the past 90 years. Compare this to leaving your money in a savings account, which currently returns less than 0.1%.

There are several great Index Funds that follow the overall market, but there are 2 in particular that have extremely popular and my personal favorite:

  • $SPY: SPDR S&P 500 ETF Trust

 This ETF follows the S&P 500 and has a great reputation for having an extremely low expense ratio of 0.09%. Over the past 10 years, this ETF has returned an average of over 11% per year.

  • $QQQ: Invesco QQQ Trust

 This ETF follows the NASDAQ-500 Index, which is composed of several tech companies such as Apple, Amazon, and Tesla. Over the past 10 years, this ETF has returned an average of over 17% per year.


I don't discourage anyone in researching companies and making small investments in your findings, but I would suggest having long-term investments around the overall market.

Comments

Popular posts from this blog

Investing with Robinhood

Building Market Intuition

Stock Trading Psychology