We recently published a list of Starter Stock Portfolio 12 Safe Stocks to Buy. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other best beginner stocks.
The US stock market has experienced a turbulent first quarter of 2025, marked by increased volatility and negative returns across the major indices. Concerns surrounding tariffs, economic data, and the performance of key technology stocks contributed to this challenging period for investors.
The year began with the revelation of DeepSeek, an Artificial Intelligence (AI) software developed in China, which rivalled its US competitors, such as ChatGPT. The software was considered revolutionary compared to others, sending shockwaves across the global markets. Reuters reported a global investor sell-off across US indexes, with one of the major tech companies alone losing $593 million in one day.
The US government was quick to implement policies that are aimed to promote US-listed tech firms while simultaneously reducing the impact of the DeepSeek AI, such as the use of tariffs against trade with Chinese firms.
The uncertainty of the US economy added to the market volatility after the Federal Reserve announced it would maintain interest between 4.25% and 4.50% in the short term. The banking sector, which is considered a good investment during times of high interest rates, is not completely immune. Analysts who previously considered 2025 to be a low-interest rate year will now price in the impact of possible NPLs (non-performing loans) due to consistent fed rates.
In March, President Trump announced further global tariffs on Europe and China, fuelling the concerns of investors. In retaliation, Europe introduced counter tariffs. Emily Bowersock Hill, CEO and founding partner at Bowersock Capital Partners, which has $850M in assets under management, responded in an email to the methodology in calculating the tariffs by the US as:
“So simplistic, and frankly primitive as to leave the market wondering, did its architects ever take Econ 101?”
The US announced tariffs of 54% on Chinese goods, which will take effect on April 9, 2025. China, in response, implemented “reciprocal” tariffs on US goods of 34%, as reported by the country’s official Xinhua News Agency. This led to the US market indexes experiencing the biggest drop since COVID-19, with investors concerned about the impact of these tariffs on the supply chains of companies globally.
The US economy is considered to be entering “continuous stagflation”, which is defined as continued inflation with very low growth and high unemployment. The Cboe Volatility Index (aka VIX) is currently at 29.68%, well above its 1-year average of 17.6%. In such economic conditions, investors should seek stocks which should provide steady/ growing revenue, dividend growth, low cyclicality, and significant cash flows and have a durable competitive advantage. Systemically important sectors are thus ideal for investors, including energy, real estate, healthcare, finance, and tech.
