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If you have read my book, or seen some of my tweets, you will know that when starting your investing journey I believe it is best to lay your foundation with high-quality ETFs and Dividend Stocks
I like to call these "Foundational Stocks"
Let me Explain
THREAD
I like to call these "Foundational Stocks"
Let me Explain
THREAD
1/
As I mentioned, Foundational Stocks are some of your highest quality stocks.
These are positions you can count on year in & year out
As I mentioned, Foundational Stocks are some of your highest quality stocks.
These are positions you can count on year in & year out
2/
An S&P 500 ETF is always a great place to start
These ETFs track the S&P 500 Index, and in fact, many active managers over the years struggle to beat the index on a consistent basis
These ETFs include: $VOO $SPY $IVV
An S&P 500 ETF is always a great place to start
These ETFs track the S&P 500 Index, and in fact, many active managers over the years struggle to beat the index on a consistent basis
These ETFs include: $VOO $SPY $IVV
3/
Let's look at $IVV since that is the one I have a position in, but they are all the same
When you own $IVV, here are the top stocks in that fund
$AAPL
$MSFT
$AMZN
$FB
$TSLA
$GOOGL / $GOOG
$BRK.B
$JNJ
$JPM
These top stocks make up 27% of the fund
Let's look at $IVV since that is the one I have a position in, but they are all the same
When you own $IVV, here are the top stocks in that fund
$AAPL $MSFT $AMZN $FB $TSLA $GOOGL / $GOOG $BRK.B $JNJ $JPMThese top stocks make up 27% of the fund
4/
When looking at individual Foundational Stocks, I like to look for consistency, strong management team, and an evolving business.
I will share a few of my favorites now
When looking at individual Foundational Stocks, I like to look for consistency, strong management team, and an evolving business.
I will share a few of my favorites now
5/
Let's start with Johnson & Johnson $JNJ
The company has an array of products that are used on a daily basis in almost every household
Band-aid
Neutrogena, Clean and Clear
Aveeno, Johnson's Baby
Rogaine
Tylenol, Motrin, Zyrtec, Benadryl
Listerine
And MORE
Let's start with Johnson & Johnson $JNJ
The company has an array of products that are used on a daily basis in almost every household
Band-aid Neutrogena, Clean and Clear Aveeno, Johnson's Baby Rogaine Tylenol, Motrin, Zyrtec, Benadryl ListerineAnd MORE
6/
Another Foundational stock over the years has been The Coca-Cola Company $KO
They have some great brands, sometimes too many, which they are in the process of consolidating
Another Foundational stock over the years has been The Coca-Cola Company $KO
They have some great brands, sometimes too many, which they are in the process of consolidating
7/
Let's counter $KO with $PEP, who also has a well established drink lineup but also mixes in everyday snacks
Aquafina
Pepsi, Mountain Dew, Gatorade
Tropicana
Doritos, Tostitos, Lays, Cheetos, Ruffles
Quaker Oats
AND MORE
Let's counter $KO with $PEP, who also has a well established drink lineup but also mixes in everyday snacks
Aquafina Pepsi, Mountain Dew, Gatorade Tropicana Doritos, Tostitos, Lays, Cheetos, Ruffles Quaker OatsAND MORE
8/
Last but certainly not least is $AAPL
The company continues to innovate, and although they pay a small dividend now, I expect it to grow consistently over time
iPhone
Cloud
Apple Watch
Apple Tv+
MacBook
Apple Car??
To name a few
Last but certainly not least is $AAPL
The company continues to innovate, and although they pay a small dividend now, I expect it to grow consistently over time
iPhone Cloud Apple Watch Apple Tv+ MacBook Apple Car??To name a few
9/
All of these stocks I believe are worthy of a position in every portfolio. Having exposure to safety allows investors to sleep well at night
Don't underestimate the importance of maintaining a solid portfolio foundation
Then you can mix in growth for higher return potential
All of these stocks I believe are worthy of a position in every portfolio. Having exposure to safety allows investors to sleep well at night
Don't underestimate the importance of maintaining a solid portfolio foundation
Then you can mix in growth for higher return potential
10/
Right now, these stocks are trading at the following earnings multiples
$IVV 37.8x (5yr Avg = 15x)
$JNJ 20.8x (5yr Avg = 17x)
$KO 25.3x (5yr Avg = 22.9x)
$PEP 25.1x (5yr Avg = 22.8x)
$AAPL 38.5x (5yr Avg = 32.7x)
Right now, these stocks are trading at the following earnings multiples
$IVV 37.8x (5yr Avg = 15x)
$JNJ 20.8x (5yr Avg = 17x)
$KO 25.3x (5yr Avg = 22.9x)
$PEP 25.1x (5yr Avg = 22.8x)
$AAPL 38.5x (5yr Avg = 32.7x)
11/
These are all great stocks to build a portfolio around. When first starting, refrain from chasing after the "Get Rich Quick" schemes as those could end poorly
These are all great stocks to build a portfolio around. When first starting, refrain from chasing after the "Get Rich Quick" schemes as those could end poorly
