Warren Buffett is one of the most successful investors in history and his name is synonymous with picking winning stocks that can produce huge gains. He’s equally famous for his modest lifestyle, buying suits off the rack and living in a small home, and applies his simple lifestyle to investing by only buying stocks for companies that produce easily understood products that are attractive to lots of people who will buy them. One of the great benefits to you as a casual investor is that you can look at the stocks Warren Buffett is buying and most times the share prices are well within reach for an average investor and you can quickly understand why Buffett is adding these stocks to his portfolio. Read on to find the top 6 stocks Warren Buffett is buying right now and why you should too.
Whether you agree with Wal-Mart’s business practices may be a point of contention, but what can’t be argued with is the consistent returns that Wal-Mart produces for investors year after year. With an attractive dividend and steady growth rates, even through the recession, this stock is easy to feel bullish over and Warren Buffett recognizes the upside for this retail behemoth.
2. American Express
Investing in banks and credit card companies may seem risky after we saw what happened to many respectable financial firms during the recession, but zeroing in on the strongest companies is what Buffett is best at and he loves American Express. American Express differentiates itself from other credit card companies by targeting wealthier customers who spend more money and aren’t as subject to hard times in a tough economy. By using savvy strategies American Express has climbed from a low of $10 per share in 2009 all the way up to $80 per share and shows no sign of slowing down.
3. Wells Fargo
Another financial institution that performed well through the recession and continues to grow is Wells Fargo. Warren Buffett has set aside nearly a quarter of his entire portfolio to just Wells Fargo stock. What Buffett sees in Wells Fargo is a very well diversified company that was able to weather the worst of the recession and maintain steady growth, or at least limit losses substantially compared to other banks.
4. Coca Cola
Coca Cola has been one of the strongest performing stocks of the 20th century and for almost 40 years it’s performed extremely well in the food and beverage sector. With consistent growth, a very attractive dividend and a clear and well defined global growth strategy it’s no wonder Warren Buffett has held Coca Cola stock for many years.
5. Procter & Gamble
You’ve probably heard of this company but may not be familiar with their products. However, if you look in your medicine cabinet or under your sink you are almost certainly going to find a few of their products in your home. This company is one of the biggest home products companies in the world producing everything from razors to cleaning products and are a major part of most American’s daily lives. Warren Buffett loves companies like this one that are already ingrained in your daily life and that has an innovative streak creating new products consumers happily purchase.
Wait a minute, you might be saying, I thought IBM has been really volatile recently? Well you might be right but looking at the short term isn’t how Warren Buffett chooses his stocks and you shouldn’t either. Over the long term IBM has been incredibly successful at producing long term growth. If you can look past the short-term slumps time and again IBM comes out stronger and with a higher share price than before the downturn. Warren Buffett is a strong believer in value stocks like IBM and consistently chooses these kinds of companies to be a major part of his portfolio.