Masters of everything – piano, drawing, surgery, golf – must start at the beginning, learn the basics, and build up skill after skill. It’s the same with investing. Instead of jumping into buying companies you don’t understand, it’s best to start with companies that are relatively easy to understand.

Here’s a look at three promising companies, each easier to understand than many others.

1. Nike

Just do it – a familiar slogan from Nike (NYSE: NKE) — is a good message for those considering starting invest in the stock market. You shouldn’t start until you’re ready to investof course, but once you are debt free and have financing emergency fundit’s time to think about saving money for your retirement or other financial goals.

Nike is a great stock to start with because its business model – how it makes its money – is pretty easy to understand. It sells shoes and apparel, mostly of the athletic type, and sells them mostly in physical stores, although its digital sales have grown rapidly. It has partnered with suppliers around the world for much of its manufacturing, and its strong brand allows it to charge high prices for its wares. (His brand was recently valued at $39 billion and ranks 13th in the world, per year Forbes listing.)

Nike’s future is bright in part because of its proven ability to innovate, regularly introducing new shoe designs and new “technology”. It also has great growth potential outside of the United States, as recently success in china demonstrates. Meanwhile, Nike is doing well in the present as well – its second-quarter revenue was up 9% year over year, despite an ongoing pandemic, and digital sales were up by 84%.

2. Coca-Cola

It is always important to understand the business model of any company you are considering investing in, and the Coca Cola (NYSE:KO) business model is a great example, because it’s not quite what some might expect.

You might think Coca-Cola makes its flagship drink and ships it around the world, but you’d be wrong. It would be very expensive, all that traffic and transportation. Instead, it produces the syrup with which the drinks are made and sells them to bottling companies. Diversification is also part of its strategy: it not only has a bunch of soft drinks under its roof, like Sprite, Barq’s and Schweppes, but it also encompasses waters (like Dasani, smartwater and vitaminwater), coffees (like Costa and Georgia), teas (such as Fuze Tea, Honest, and Gold Peak tea), juices (such as Minute Maid and Simply), energy and sports drinks (such as Powerade), and more. (The Coca-Cola brand, by the way, ranked sixth on Forbes’ 2020 Brand Value List, with value set at $64 billion.)

Coca-Cola is unlikely to grow at a rapid pace, but it is likely to grow. Its growth is partly organic, as the world’s population grows and more countries develop middle classes capable of enjoying many soft treats, and partly through new product development and acquisitions. Coke has entered new markets over the years, such as water and coffee, giving it new growth prospects.

As of this writing, Coca-Cola shares are down about 19% from their 52-week high, and they’re returning 3.4%. That’s a decent (and growing) payout to enjoy – on top of the likely stock price appreciation over the years.

3.Visa

The credit card juggernaut Visa (NYSE:V) is another company that’s relatively easy to understand – although, like Coca-Cola, its business model may surprise you. When you use a Visa card to charge for a purchase, you are borrowing from a bank or other lender linked to the card – not Visa – and that entity, not Visa, collects all interest payments. that you are doing. But Visa gets a percentage of every purchase you make, through fees charged to vendors. It’s a modest percentage, but it adds up: Fees make up the bulk of Visa’s revenue, and Visa raised more than $21 billion in fiscal 2020.

Visa is another agile company, adapt to changing times by offering new payment methods such as tap-to-pay and new payment features, such as enhanced security via tokens. As digital payments increase globally in the coming years, Visa will benefit.

Visa pays a dividend, and while its recent yield, at 0.6%, is rather paltry, it is growing rapidly – by an annual average of around 18% over the past five years. If it continues to grow at a similar rate over the next decade, its payout will increase roughly fivefold.

These are just three of the many interesting actions that newbie investors might consider. A little time spent reading and exploring online can easily generate other candidates. You can also think about companies you know well and frequent – ​​some of these may be contenders for your portfolio.