You typed "what are two good stocks to invest in?" into Google. I get it. You have some money saved, you're tired of inflation eating away at your cash, and you want your money to start working for you. You want names. Tickers. But if I just blurt out "MSFT and BRK.B" and send you on your way, I've done you a disservice. Picking stocks without a framework is like building a house without a blueprint. It might stand for a while, but the first storm could wipe it out.

So here's the deal. I'm going to give you two specific stocks I believe are excellent candidates for a long-term investor. But first, we're going to spend crucial time on the mindset and criteria that make a stock "good." This foundation is what separates a hopeful gambler from a confident investor. The two stocks I'll detail are Microsoft (MSFT) and Berkshire Hathaway (BRK.B). One is a tech titan dominating the future, the other is a timeless lesson in value and capital allocation run by legends. They represent two powerful, complementary approaches.

Your Quick Guide to This Article

How to Think About "Good" Stocks Before You Buy a Single Share

Most beginners fixate on the price chart. Up is good, down is bad. This is a terrible way to invest. It's reactive and emotional. The real question isn't "what stock will go up tomorrow?" It's "what business do I want to be a part-owner of for the next decade?"

Think of it like buying a rental property. You wouldn't buy a house just because its price jumped last week. You'd look at the foundation, the roof, the neighborhood, the rental income potential. Stocks are the same. You're buying a tiny piece of a real business.

The biggest mistake I see: People chase the "hot" stock they heard about on social media, often when it's already had a massive run-up. They buy high out of fear of missing out (FOMO), then panic and sell low at the first sign of trouble. This cycle loses money. We're going to avoid that by focusing on business quality, not stock price gossip.

What Makes a Stock "Good"? The 3-Point Checklist

For a long-term hold, a "good" stock usually comes from a business that ticks most of these boxes. Use this as your filter.

1. A Durable Competitive Advantage (The Moat)

Can competitors easily steal its lunch? A wide "moat" means no. It could be brand power (like Coca-Cola), network effects (everyone uses Microsoft Office because everyone else uses it), proprietary technology, or massive scale. A moat lets a company earn high profits for years.

2. Competent and Trustworthy Management

Are the CEOs and executives good capital allocators? Do they use profits to reinvest in the business, pay dividends, or buy back shares wisely? Or do they waste money on ego-driven projects? You can judge this by reading shareholder letters (Warren Buffett's at Berkshire Hathaway are masterclasses) and looking at their track record of returns on invested capital.

3. Trading at a Reasonable (Not Necessarily Cheap) Price

Even the best business is a bad investment if you overpay. You don't need to find a dirt-cheap bargain, but you should have a sense of whether the current stock price reflects the company's future growth prospects. This is where basic valuation metrics like the Price-to-Earnings (P/E) ratio come in, compared to its own history and its industry.

With that framework in mind, let's look at two stocks that, in my view, score highly on this checklist.

Stock Pick #1: Microsoft (MSFT) – More Than Just Windows

If you think Microsoft is just the company that makes Windows, you're about a decade behind. Under CEO Satya Nadella, MSFT has transformed into a cloud-computing and AI behemoth. It's the definition of a business with a reinvented and widening moat.

Why it's a "good" stock:

  • The Azure Moat: Its Azure cloud platform is a dominant #2 behind Amazon Web Services (AWS). Once companies build their infrastructure on Azure, switching costs are enormous—it's a sticky, recurring revenue stream. According to their latest earnings report, Azure and other cloud services revenue grew 31% year-over-year.
  • The Office 365 Ecosystem: Over 400 million paid seats. It's not just software; it's a productivity suite embedded in businesses and schools worldwide. This creates a natural funnel for selling other services like Teams and security solutions.
  • The AI Frontrunner: Through its massive partnership with OpenAI (creators of ChatGPT), Microsoft is baking AI co-pilots into everything—from GitHub for coders to its Office suite. They are monetizing the AI wave directly.
  • Financial Fortress: The company prints cash. It has over $80 billion in cash and short-term investments, a AAA credit rating (rarer than a unicorn), and a growing dividend that it has increased for nearly 20 consecutive years.
Key MetricMicrosoft (MSFT)Why It Matters
Market Cap~$3.1 TrillionSize and stability; a blue-chip anchor for any portfolio.
Forward P/E Ratio~33xNot cheap, but reflects high growth expectations for cloud & AI.
Dividend Yield~0.7%Small but growing; a bonus, not the main reason to invest.
5-Year Revenue Growth~14% CAGRShows successful transformation and consistent expansion.

The catch (because there always is one): At this size and valuation, Microsoft needs to keep executing perfectly on AI to justify its price. Any major slowdown in Azure growth would hurt the stock. It's also constantly under regulatory scrutiny. This isn't a hidden gem; it's a premium-priced leader. You're paying for quality.

Stock Pick #2: Berkshire Hathaway (BRK.B) – The "Steady Eddie" Conglomerate

Berkshire is a different beast. It's not a tech story. It's a capital allocation story. You're not buying a single business but a collection of wonderful businesses (Geico, BNSF Railway, Dairy Queen, See's Candies) and a massive stock portfolio (Apple, Bank of America, Coca-Cola) managed by Warren Buffett and his team.

Think of BRK.B as buying a professionally managed, ultra-diversified fund with a 60-year track record of crushing the market, but with a key tax advantage—it doesn't pay dividends, so taxes are deferred until you sell.

Why it's a "good" stock:

  • The Buffett Factor (Still): While Warren Buffett is 93, the philosophy is institutionalized. The focus is on buying businesses with enduring moats at sensible prices. The culture of frugality and rational capital allocation is deeply embedded.
  • Massive Financial Strength: Berkshire sits on over $167 billion in cash and Treasury bills (as of Q1 2024). This is a "war chest" for economic downturns. When markets panic, Buffett can swoop in and make deals nobody else can, buying great assets at fire-sale prices. This downside protection is invaluable.
  • Built for All Weather: Its mix of insurance (cyclical), railroads and utilities (stable), and consumer brands (defensive) means it's built to weather different economic storms. It's not the fastest grower, but it's incredibly resilient.
  • It's a Simplifier: For a new investor, buying one share of BRK.B gives you instant, diversified exposure to the U.S. economy through a brilliant filter. You don't have to pick 50 stocks yourself.
Key MetricBerkshire Hathaway (BRK.B)Why It Matters
Market Cap~$900 BillionEnormous scale and influence, yet still nimble with its cash pile.
Price-to-Book Ratio~1.6xA key Buffett metric; it's historically reasonable, not screaming cheap.
Dividend Yield0%All profits are reinvested to compound value internally.
Cash & Equivalents>$167 BillionDry powder for crises and opportunities; a huge margin of safety.

The catch: Its sheer size makes it harder to grow rapidly. It will likely perform closer to the overall market's returns, not dramatically beat it as it did in its earlier decades. The post-Buffett transition, whenever it happens, is an unknown. Some investors also dislike the lack of a dividend.

How to Actually Buy These Stocks: A Step-by-Step Scenario

Let's get practical. Say you have $5,000 you're ready to invest for the long term (meaning you won't need it for 5-10 years).

  1. Open a Brokerage Account: Use a low-cost platform like Fidelity, Charles Schwab, or Vanguard. The process is online and takes about 15 minutes. I use Fidelity for my IRA; their app is straightforward.
  2. Fund the Account: Link your bank account and transfer the $5,000. It might take 1-2 business days to settle.
  3. Place Your Order: In your brokerage app, search for the ticker "MSFT." Select "Buy." Choose "Order Type: Market" for an immediate purchase at the current price. Enter the number of shares or dollar amount. For example, you might decide to put $2,500 into MSFT. Repeat for "BRK.B" with the remaining $2,500.
  4. Then, Do Nothing (The Hardest Part): Set up automatic quarterly reminders to check the companies' earnings reports, not the stock price daily. Your job is to monitor the business health, not the ticker's mood swings.

I'd caution against putting all $5k in at once if you're nervous. A strategy called "dollar-cost averaging"—investing $1,000 per month over five months—can smooth out volatility and build confidence.

Your Top Investment Questions, Answered

Should I just buy the S&P 500 index fund (like VOO or SPY) instead of picking individual stocks like MSFT or BRK.B?
For most people, yes, that's the smarter, simpler starting point. An S&P 500 fund gives you instant ownership of 500 top companies, including Microsoft and Berkshire. It's diversified and historically delivers ~10% annual returns. Picking stocks requires more research, emotional fortitude, and time. My advice: Start with the index fund for the core (say, 80%) of your investment money. Then, if you're interested, use a smaller portion (the 20%) to learn by buying individual stocks like the ones discussed here. That way, you get market returns plus the education.
What's a realistic expectation for returns from these "good" stocks?
Expecting to double your money in a year is a recipe for disaster and risky bets. A more realistic long-term expectation for quality companies like these might be 8-12% average annual returns over a decade, though any single year could be up 30% or down 20%. The power is in compounding over time. $10,000 growing at 10% per year becomes about $67,000 in 20 years—without you adding another dime. The goal is steady wealth building, not getting rich quick.
How much money do I actually need to start?
You can start with the price of a single share. One share of BRK.B is around $400, MSFT around $430. Many brokers also offer "fractional shares," where you can invest a set dollar amount (like $100) and own a piece of a share. The barrier to entry is virtually zero. The more important factor is committing to adding money regularly from your income, even if it's $50 or $100 a month.
When is the best time to buy?
The best time was 20 years ago. The second-best time is consistently, over time. Trying to "time the market"—waiting for a crash or a dip—is a fool's errand for 99% of investors. More time in the market beats timing the market. If you believe in a company for the next 10 years, a 5% price difference today is noise in the long run. Set up automatic investments and remove emotion from the equation.
Aren't these stocks too big and old to grow much more?
It's a fair concern. They won't grow 50% a year like a small startup. But size brings stability, financial resources, and pricing power. Microsoft is growing its cloud and AI revenues at a double-digit clip on a massive base—that's incredibly impressive. Berkshire can make multi-billion dollar acquisitions smaller companies can't dream of. Their growth may be more moderate, but it's potentially more predictable and less risky. For the core of a portfolio, that's often a desirable trade-off.