When first beginning an investment journey, it can be difficult to decipher what are the best stocks to consider buying.
There’s no two ways about it, the stock market can be daunting. There are many industries and businesses to research. Sometimes, it can all seem too much.
But not to fear. Thankfully, there are many resources available today, including The Motley Fool.
With that, here are two picks I reckon investors starting today should consider.
Luxury stalwart
Burberry (LSE: BRBY) is my first option. The famous business needs little introduction. It sells high-end luxury goods and has been doing so for over 100 years.
While the brand is associated with the best of the best, its share price has seen an underwhelming performance lately. In the last 12 months, it has fallen by 53.7%.
There’s one main reason for this. Spending has slowed down and the global luxury market has experienced a downturn and Burberry has issued two profit warnings recently.
However, I see its shares being provided with a lift when interest rates start to come down, which will hopefully happen later this year. Consumer spending on luxury goods should pick up. As a result, Burberry could see an uptick in sales.
The business is also well-positioned to capitalise on growing wealth in Asia. The ongoing rise of the middle-class in nations such as China will hopefully lead to a recovery for the company. That’s especially true since Asia accounts for over 40% of its revenue.
Drinks giant
I’d also consider Diaego (LSE: DGE). It’s one of the largest alcohol businesses in the world and is best known for brands such as Guinness and Smirnoff. Like Burberry, its share price has suffered in recent times. In the last 12 months, it’s down 18.8%.
As is the case with Burberry, the main reason for its decline has been a drop in sales. For Diageo, this has been in its Latin America and Caribbean (LAC) territory, where for the six months to 31 December sales fell by $300m.
But that isn’t too much of a concern for me. As I said, consumers have been cutting back on spending as inflation has squeezed pockets, which explains the fall. What’s more, its presence in the region excites me. Disposable incomes are set to rise in the LAC territory in the upcoming years, this should help sales figures.
The business plans to keep expanding in the years to come. It wants to increase its market share from the current 4.7% to 6% by 2030.
Takeaway message
The most pertinent message from these two stocks is to invest in what you know and understand. It’s a solid piece of advice that fabled investor Warren Buffett has reiterated throughout the years. And one that I’ve applied to my portfolio.
I think it’s key. He says we should invest in companies where we know how they generate revenue. With Burberry and Diageo, it’s simple to see.
Both businesses have faced challenges, and they’ll likely continue to do so in 2024 as the economic environment remains choppy. But over the course of the years to come, I’m bullish on both.
The two stocks above, in my opinion, are great starting points. If I had the spare cash, I’d consider buying them today.
