Best shares to buy: I’m building my portfolio around these 4 stocks

The best shares to buy depend on an investor’s financial goals and risk tolerance. For some, the best shares are lower-risk dividend stocks. For others, the best investments are growth stocks. Here, I’m going to highlight four stocks I’m building my own portfolio around. I believe these stocks are some […]

The best shares to buy depend on an investor’s financial goals and risk tolerance. For some, the best shares are lower-risk dividend stocks. For others, the best investments are growth stocks.

Here, I’m going to highlight four stocks I’m building my own portfolio around. I believe these stocks are some of the best shares to buy today, given my investment horizon (20 years+) and risk tolerance (high).

Warren Buffett’s top stock

The first stock I want to highlight is Apple (NASDAQ: AAPL), which is Warren Buffett’s top holding. There are several reasons I like Apple as a long-term investment. One is the amazing ‘ecosystem’ it has developed. This has consumers (myself included) locked in, providing a competitive advantage.

Another is the growth in the company’s services division (Apple Pay, App Store, etc). This revenue is growing strongly and becoming a significant part of overall revenues.

Apple shares have had a great run in recent years. This doesn’t put me off though. In the long run, I think this company is likely to get much bigger.

A technology powerhouse

Another stock I’m building my portfolio around is Microsoft (NASDAQ: MSFT), a technology powerhouse that’s growing rapidly. Microsoft has dominant positions in a number of growth industries.

Not only is it the leader in business productivity solutions and work-from-home technology, but it’s also a major player in the cloud computing and video gaming industries. All of these industries are set to grow significantly in the decade ahead. This growth should provide tailwinds for MSFT.

The heart of the internet

The third stock I see as one of the best shares to buy is Alphabet (NASDAQ: GOOG), the owner of Google and YouTube. I like Alphabet for two main reasons.

Firstly, I see Google as the heart of the internet. If you want to find something online, you generally go through Google. This means Alphabet is in a powerful position from an advertising perspective.

Secondly, I’m excited about YouTube’s growth potential. This platform is growing at an incredible rate and has become a dominant form of entertainment.

The king of online shopping

Finally, another core holding for me is Amazon (NASDAQ: AMZN), the biggest player in both e-commerce and cloud computing.

Amazon has delivered phenomenal growth in recent years. However, in my view, it’s just getting started. Here in the UK, its market share in e-commerce is only around 10%. So I think there’s plenty of room to grow.

It’s worth noting that the cloud computing industry is forecast to grow at nearly 20% per year between now and 2025. This industry growth should benefit AMZN.

Risks

It’s worth pointing out that there are risks associated with each of these stocks. None are cheap. This means there’s valuation risk. If these companies experience setbacks (such as regulatory action), or there’s a market correction, their share prices could fall significantly.

As a UK investor, I also face foreign exchange risk because these stocks are all listed in the US. I’ll also say that, in the short term, these stocks could underperform the market. Right now, investors are focused on reopening stocks and Big Tech is out of favour.

From a long-term perspective however, I think these stocks have enormous potential. That’s why I see them as some of the best shares to buy today.

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Edward Sheldon owns shares in Apple, Amazon, Microsoft, and Alphabet. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Alphabet (C shares), Amazon, Apple, and Microsoft and recommends the following options: long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The post Best shares to buy: I’m building my portfolio around these 4 stocks appeared first on The Motley Fool UK.

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