Introducing the "Stocks For Beginners" collection

There are more than 15,000 publicly-traded companies listed on the stock exchanges in the U.S. Even if we ignore smaller and volatile penny stocks and only focus on the three main exchanges, NYSE, NASDAQ, and OTCM (Over The Counter Markets), there are still more than 6,000 individual stocks every investor has to review and choose from. More experienced investors have already learned and come up with a process to narrow down their focus to only a small set of companies on their watchlist. However, if you are a new investor, facing more than 6,000 stocks feels confusing and overwhelming. Where does a new investor start from? And, what criteria should you use to find a starting list of companies to build a portfolio?

Launching Stock Card's "Stocks For Beginners" collection

When started the process, we asked our first-time users and investors what matters to them the most, and came up with four criteria to screen the universe of 15,000 publicly-traded companies for the gems that are worthy of the attention of a beginner investor:

• Market capitalization of > $2 billion - To avoid smaller companies that have more volatile stocks.
• Stock price is < $500 per share - To make it more affordable. Most new investors do not want to jump in with thousands of dollars to start.
• Years since IPO >= 3 years - IPOs tend to be more volatile and less stable.
• Beta (a measure of volatility) is < 1.2 - To make sure the beginner investors don't deal with extremely volatile stocks. 

Once we applied those filters, we got to a list of 762 publicly-traded stocks. However, we didn't stop there. We still need to make sure the companies on the radar of a new investor can survive market volatility and tough economic times. The bedrock of a starter portfolio has to be companies that are financially robust enough to weather possible economic rough periods, and don't struggle with cash to run their operations. To achieve that goal, we applied a few additional filters similar to what we have used for our "Strong Balance Sheet" collection to only keep the strongest companies with the most reliable stocks out there.

Final results

The result of the above screening is a list of more than 64 stocks that you can easily access, play around, and build your own starter portfolio. There is no guarantee that these 64 stocks continue to grow and not lose value. After all, we are dealing with the stock market that fluctuates by nature. However, these 64 stocks give a starter investor a chance to create a portfolio with less risk and more stability. Have a look at the Stocks For Beginners collection today:

Get the list of Stocks For Beginners

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Every year in January, we create a new STARTER portfolio for our new investors. These portfolios consist of stable companies, with well-known brands and strong balance sheets, that are operating in growing sectors, industries, and markets. The goal of these portfolios is to get new investors started with one reliable stock pick example each month. If you are new to investing, follow the latest Starter Portfolio, and get notified each month about a new starter-friendly stock pick. ​Visit the Starter Portfolio, 2020 edition ...

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