In this article, we discuss the 10 best stocks to buy for financial stability.
Investing in stocks is one of the most effective ways to build long-term financial stability. While stocks can be volatile in the short term, history has shown that they generate higher returns over time compared to other asset classes. With the right strategy, investing in stocks can help individuals accumulate wealth, hedge against inflation, and secure a comfortable retirement. Stocks have historically outperformed other investment vehicles, such as bonds and savings accounts. According to data from the S&P 500, the stock market has delivered an average annual return of about 10% before inflation over the past century. In contrast, bonds have yielded around 5–6%, while traditional savings accounts provide returns of less than 1% annually. Recent studies reinforce this trend. A 2024 report from JP Morgan Asset Management found that over any 20-year period, the likelihood of losing money in the stock market is close to zero. Even with market downturns, those who stay invested tend to see significant growth.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
The power of compounding is a key reason why investing in stocks enhances financial stability. The earlier an individual starts investing, the greater the impact of compounding. For example, if an investor puts $5,000 annually into an index fund earning 8% per year, they would accumulate approximately $1.3 million over 40 years. This long-term growth potential allows individuals to plan for major life events, such as purchasing a home, funding education, or retiring comfortably. The US Federal Reserve reports that individuals with investment portfolios of at least $100,000 are significantly more likely to achieve financial security than those relying solely on savings. While stocks can be volatile, diversification helps reduce risk. A well-balanced portfolio containing stocks from different sectors, as well as international investments, can mitigate losses during market downturns.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we scoured investing forums, analyst reports, and advice from money managers and billionaires to compile a list of stock options that can provide financial stability to investors. These stocks belong to defensive sectors like consumer staples, healthcare, and energy. Many of these companies have solid dividend histories and enjoy a stable market position. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Stocks
Best Stocks To Buy For Financial Stability
10. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 58
PepsiCo, Inc. (NASDAQ:PEP) manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. In the fourth quarter of 2024, the company’s operating profit rose by 163%, largely due to the 148% boost from last year’s impairment charges related to the SodaStream business. In January, the company announced that it had closed the acquisition of Siete Foods. With Siete, PepsiCo will further expand its portfolio of products with nutritious, simple foods and ingredients and bring this popular, growing brand to new fans in even more places. In February, the Board of Directors of PepsiCo declared a quarterly dividend of $1.355 per share of PepsiCo common stock, a 7% increase versus the comparable year-earlier period.
