Warren Buffett: The Best Stocks to Buy Right Now

Warren Buffett is front and centre of attention in the investing world again this week after releasing his letter to shareholders this past weekend.

Buffett has been releasing the letter to shareholders for years, and it has long been one of the best opportunities to get an idea into how he is thinking and what he sees in financial markets. Some of his best advice has come from these letters to shareholders over the years, so it’s definitely worth a read.

As usual, one of his biggest recommendations is to never bet against America, especially over the long term. Buffett, being a long-term investor, has tremendous belief in America’s long-term potential.

The American economic engine is the most powerful in the world. Therefore, if you invest for the long-term and buy high-quality companies, you should always be rewarded.

And while Buffett will never exclusively recommend a single stock or investment, his comments help you understand exactly the types of businesses he looks to buy.

So, according to Buffett’s qualities of a top stock, here are some of the best to buy right now.

Warren Buffett: Consider index funds

Firstly, one of his most consistent recommendations for investors is to buy index funds. Investing in index funds is the furthest thing from exciting, so many investors choose not to buy index funds.

In reality, though, the average investor will consistently fail to outearn index funds. Even professional investors have a difficult time outperforming index funds year after year. So, while they may not be exciting, they are practical investments.

In addition to offering returns that the average investor will fail to meet, index funds offer several other benefits, which is why Warren Buffett recommends them.

It’s much easier to buy index funds and hold for the long term than it is to research hundreds of stocks consistently. Plus, the natural diversification and low-cost management fees make it an extremely efficient investment.

One way to invest you may want to consider is to invest half of your portfolio in index funds and the rest in stocks you choose. This way, you’ll have adequate diversification and some exposure to the broader market while still being able to choose your own stocks.

The best stocks to buy right now

If you’re looking to invest stocks alongside index funds, some of the best to buy right now are in the green energy industry. A stock like Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN) is an ideal choice for long-term investors who want to buy stocks like Warren Buffett.

First and foremost, Algonquin is a great company with a strong and competent management team. Algonquin also has highly resilient earnings as a result of its utility business.

Any company with resilient and predictable cash flow, Warren Buffett likes. And Algonquin is especially attractive, because it uses the stable cash flow to underpin its attractive dividend.

However, one of the most compelling reasons to buy Algonquin is its long-term potential. The industry that a company operates in is crucial to Warren Buffett. It’s important that not only the company is strong but that it also operates in a long-term growth industry.

The green energy industry is one of the highest-potential sectors over the next decade. So, a stock like Algonquin offering investors long-term growth and resiliency is a perfect example of a top stock to buy today.

More reading

• 5 Under $50 TSX Stocks to Buy Now for Superior Returns
• 3 Best TSX Stocks to Buy Right Now
• 2 Top Canadian Stocks to Buy in March to Make Millions
• 3 Top TSX Stocks Income Investors Should Buy Right Now
• This Underrated Utility Is a Must-Buy

Fool contributor Daniel Da Costa owns shares of ALGONQUIN POWER AND UTILITIES CORP.

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