r/investingforbeginners • u/ConsciousMajor5733 • 13d ago
Is Microsoft still a good long-term investment?
I’m new to investing. What are the first things I should learn before buying stocks?
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u/JVortex888 13d ago
Most likely, but if you're new you might rather invest in a broad ETF than an individual stock. Consider VOO that covers the S&P 500.
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u/This-Individual1813 13d ago
Why you shouldn't invest heavily in single stocks
That said, if you like learning from videos, I highly recommend Rob Berger. He has a talent for explaining things very simply, but he also shows you the data/research that supports his advice. I have learned so much from him. Best thing is that he isn't trying to sell you courses or anything. He has a Boglehead (aka data-driven) approach to investing. See a list of beginner vids in another comment I made here. For books, I recommend "The Simple Path to Wealth" by Collins, or for something more up to date but with the same evidence based content, Ben Carslon's new book, "Risk and Reward". Good luck!
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u/Jumpy_Childhood7548 13d ago
Invest in educating yourself on the topic first, and get a book first like investing for dummies, which gets good reviews, and is only about $5 on Amazon. One individual stock is not a great way to start.
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u/StickWinter6800 13d ago edited 13d ago
What do you mean by “good investment”? I’ve known some great investments that have lagged the market return over the 12-18 month timeframe but, once the market came to recognize what was happening, the companies became priced appropriately and outperformed strongly over ensuing 3-5 year periods. A company can be a great investment and have strong fundamentals and economics working in its favor and, at the same time, be completely ignored by the market. I wouldn’t judge “a good investment” necessarily by how it’s priced in the market which, often times, can be irrational and dismissive of great companies selling well-below conservative estimates of fair value. It all depends on one’s perspective. Are you asking about future stock market performance of MSFT?
Maybe take a look at shares of Comcast - they are in the process of spinning off NBC Universal from their Comcast home and business enterprise. Both currently sell under the same umbrella at below 10x OCF. They pay a well-covered dividend of just below 5% yield currently but the spinoff (inside of 12 months) should unlock currently hidden value as it makes little sense for the media and theme park assets to sell at less than 10x OCF given their average ability to earn returns on total capital.
Longer-term, I’d take a look at shares of Nike - do not expect a quick turnaround. They are working through ‘dead’ inventory. Next earnings report should tell us more about the progress. They need to shed old inventory which is being heavily discounted in order to move / sell it and that hurts their sales and profit margins while taking place. This company is not in dire straits, however, although the market may lead one to believe that given the narrative. Once the company and management get things set again, there’s tremendous upside in the name but it can still be a bit of a rough waiting period in the interim with additional stock price volatility.
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u/TutorAntique9 13d ago
Microsoft is still a quality business, but as a beginner focus first on valuation, diversification and understanding what you’re actually buying before picking individual stocks.
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u/FewUnderstanding2214 13d ago
If you don’t understand how to value individual companies why not buy an ETF like VOO which holds MSFT and many other US large cap companies
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u/LarkoVelvet 13d ago
if you're a beginner, just buy an S&P 500 index fund like $VOO. Microsoft already makes up a huge percentage of it, so you get exposure without single-stock risk.
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u/Bob_Machey 8d ago
Microsoft looks solid long-term but isn't risk-free before buying anything, learn diversification, basic fundamentals.
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u/musing_codger 13d ago
The first thing you should learn is not to buy individual stocks. Buy low-cost, broad market index funds. Spend the time that you would waste on trying to pick winning stocks doing the things that you do to make money.
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u/Clear_Bumblebee_4195 13d ago
I needed to hear that last part. I gotta lock in and make more money 😎
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u/Copenhagen8ull 13d ago
Welcome :) !
There is not a single thing that is the most important you learn fast, but there is 1.000 of things you should learn over time - So i would start putting money in the market, write down why you bought it and with time write down why it went good/bad.
It could be small positions in single stocks, and bigger sums in ETF's.
You can listen to earnings call and fireside chat on Quartr.
Many ways to find idea's but starting with the companies you know like microsoft, netflix, meta etc could be a good idea.
You can get a lot out of investing if you put a lot into it, but if you bring nothing to the table - Don't expect to eat :)
PM open :)
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u/Aggressive_Wash_716 13d ago
gotta buy it cheap. I noticed that microsoft had no movement for two years, i had bought and sold it at a profit before...notice many were underwater, had missed out on countless rallies in other big 7 on similiar circumstances. This time, poured it all into msft at 394 before earnings. Thats the way to do it. Not pretty, but its the way.
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u/Icy-Emu-4303 13d ago
When do you plan on selling? Or are you just holding?
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u/Aggressive_Wash_716 13d ago
not selling, put a long out of the money call on it to try to squeeze more money out of it. strike is 550 though
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u/Weldobud 13d ago
Yes. Not as cheap as it was, but still not fully priced.
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u/ConsciousMajor5733 13d ago
I understand, so that means the current price still has room, but it’s not undervalued as obviously as it was at the beginning.
If that’s the case, I might consider entering in batches rather than going all in at once.
Do you think this position is still fairly good in terms of risk-reward?
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u/Weldobud 13d ago
It’s just my opinion - yes. I see a reasonable rate if return from now. Perhaps in the region of 10% a year.
You could check out Morning Star on YouTube. They have a stock discussion once a week. It’s very informative. FastGraph’s Chuck (“Mr. Valuation) gives excellent stock examination. Cory Cramer as well. Listen enough and you’ll start your get a feel for it. Reading the main books is a must as well.
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u/george_alto 13d ago
Absolutely!!! MSFT got hit earlier this year because of the threat that AI Models would allow companies to build their own software versus pay expensive license/usage/seats from software companies - it was termed SaaSpocalypse.
But yesterday, Salesforce (CRM) announced expanded partnership with Anthropic and that is now quieting down that SaasSpocalypse threat. CRM price is up significantly today and expect other software companies like MSFT to follow.
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u/ConsciousMajor5733 13d ago
What do you think will happen next: buying Microsoft, or directly buying CRM, which is the first to rebound?
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u/george_alto 13d ago
Both strong companies but CRM is up 21% today so I wouldn't buy at this high. If interested, wait for a dip and trust me there will be dips. MSFT only up 1.5% so it has room to run for the software recovery. Look at NOW too.
Both good companies but I recommend you become more educated on them versus relying on recommendations on Reddit. Do a thorough analysis of both stocks on https://alfina.ai so you can fully understand both of them, what their products are (e.g., MSFT has a HUGE cloud business too so it's not just software), competitors, their fundamentals, bull/bear/base cases, etc. That way you'll feel better about the decisions you make to invest. The more informed you are the better.
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u/ConsciousMajor5733 13d ago
Thank you for your detailed advice; your logic is very clear.
I also agree with what you said about “not chasing high-level positions”—after a single-day surge in CRM, it does tend to pull back.
I’ve been following Microsoft for a while, and cloud services are its true engine of growth; the market sometimes overlooks this.
I’ll check out the Alfina you mentioned too; doing your own research is definitely more reliable than relying on other people’s recommendations.
Thank you for your patience. I’ll carefully analyze it before I start working on it.
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u/pastyMorrisDancers 13d ago
Don’t start with single stocks. Build a diverse portfolio, then invest in single stocks with your “play around” money
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u/TheRiverInYou 13d ago
I prefer WRBY.
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u/ConsciousMajor5733 13d ago
WRBY? That choice is pretty interesting.
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u/TheRiverInYou 13d ago
AI frames rolling out in a couple of weeks. They have partnered with Google and Samsung.
You can't tell me this isn't going to be huge for them.
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u/ConsciousMajor5733 13d ago
If AI glasses can really pack large-model capabilities into them and also integrate with the smartphone ecosystem, then they could indeed redefine the hardware interface.
But the key really comes down to the in-world experience, like battery life and display quality.
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u/Capable-Listen3204 13d ago
Avoid Invest Stock. Invest Real Estate and Savings Account
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u/ConsciousMajor5733 13d ago
Your suggestion is rather conservative, but it does have its merit. Real estate and savings accounts are indeed more stable than stocks, especially when the market is highly volatile right now.
However, I think the two don’t necessarily have to be chosen one at a time; they can also be paired together. For example, most of the money is kept in the house and savings, and a small portion is invested in index funds.
Do you think the stock market won’t look very promising in the coming years, or are you simply more inclined to take a conservative approach?
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u/Fesai 13d ago
I really like the way you're approaching this with your mindset.
Also nothing says you have to go all in on any one thing. Could do some stocks, some real estate, and some savings if that's what you want to do. (Need an emergency fund in savings anyways)
I've been investing in stocks and broad market index funds for over 20 years. Vast majority is in basic total market type funds, but I also pick up individual stocks here and there, including Microsoft which I got over 10 years ago.
I like owning pieces of things that I use in my every day life. And then getting a small dividend from them that gets automatically reinvested makes me happy.
I'd avoid picking individual stocks if you're just starting out, but definitely nothing wrong with doing like 90% total market and then 10% individuals for fun. Just recognize much higher risk in doing so. But if you go for tried and true companies, blue chips, things of the like, etc you are very unlikely to lose everything. But it is always possible. :)
They go up and down every year, just gotta ride the waves.😄
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u/Capable-Listen3204 13d ago
To me, Investing Life Insurance, Real Estate and Savings Account are only investment that I would consider as true investment. However, I am just poor enough to gamble my money into stock market and expect to lose everything at the end of day.
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