Now could be a great time for investing beginners to build a portfolio of FTSE 100 stocks. Despite rallying strongly since the spring crash, the ‘Footsie’ remains at a significant discount to its all-time high. To be precise, at its year-end level of 6,460.52, it was 18% below its peak of 7,877.45 in May 2018.
Because many share prices are currently cheap, and the index has always gone on to pass its previous highs, there appears to be good value on offer for new investors. With this in mind, here are 10 FTSE 100 stocks I’d personally be happy to buy today.
Stocks for a beginners portfolio
I’d start with a couple of the FTSE 100’s super-heavyweight stocks for a solid foundation. Branded consumer goods giants Unilever and Diageo are my favoured businesses among the 10 biggest Footsie stocks.
Unilever owns a vast array of brands in the home and personal care, and food and refreshment categories. Diageo owns an equally powerful stable of alcoholic spirits brands. Long-term rising prosperity in developing economies should help drive growth for both companies.
Meanwhile, paper-based packaging firm Smurfit Kappa, whose business is strongly weighted to consumer goods customers, should profit indirectly from the same growth theme. It should also benefit from accelerating trends in e-commerce, and rising consumer demand for sustainable packaging.
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Healthy FTSE 100 stocks
I reckon population growth and the increased prevalence of chronic diseases make Hikma Pharmaceuticals and Smith & Nephew attractive businesses to invest in.
Hikma isn’t one of the FTSE 100’s pharma giants, like AstraZeneca and GlaxoSmithKline. However, it’s growing fast, and I think it could produce higher investment returns from its lower base.
Meanwhile, medical technology firm Smith & Nephew has strong positions and expertise in a number of areas. These include hip and knee replacements, and advanced wound management.
Profiting from the digital revolution
The growth of the digital world is one of the great themes of the 21st century. There are a number of FTSE 100 stocks that should continue to profit from the digital revolution. I’d be happy to include Relx, Sage, Rightmove and Hargreaves Lansdown in my beginners’ portfolio.
Relx owns massive databases and sophisticated analytical tools. These are indispensable to professional and business customers in fields including legal, medical and insurance. Meanwhile, Sage is the global leader for technology that provides small and medium businesses with accountancy and other services.
Property portal Rightmove and investment platform Hargreaves Lansdown are the UK’s dominant players in their respective sectors. I reckon all four businesses are set to enjoy ongoing growth in the digital era.
FTSE 100 stock #10 for my beginners’ portfolio
Finally, from the excitement of the new to the appeal of the timeless. Luxury fashion house Burberry has long been seen the world over as the quintessence of British style. Its enduring global appeal, and rising numbers of wealthy consumers in places like China, put it firmly on the shopping list for my beginners’ portfolio.
The post My top 10 FTSE 100 stocks for a 2021 beginners’ portfolio appeared first on The Motley Fool UK.
Watch: COVID-19 - FTSE 100 suffers worst year since 2008 - but Wall Street rebounds
G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Burberry, Diageo, GlaxoSmithKline, Hargreaves Lansdown, Hikma Pharmaceuticals, RELX, Rightmove, Sage Group, and Unilever. 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.
Motley Fool UK 2021