As major trading platforms roll out generous account-opening bonuses, many first-time investors run into the same core question after collecting those promos: how should they actually use that money to begin a real investing journey? For beginners, the biggest challenge in the US stock market is screening—there are simply thousands of stocks to choose from. Today, I want to share a systematic stock-picking framework to help new investors avoid common traps, build a long-term investing mindset, and pursue relatively stable market returns while saving time and effort.

Core Principle: Stop Chasing “Get Rich Quick” Dreams—Stability Wins

Let’s start with an uncomfortable truth: when beginners enter the market, the easiest mistake is getting itchy fingers and wanting to buy today, sell tomorrow, and make some “fast money.” But the reality is much harsher. Short-term trading is extremely competitive and heavily influenced by news flow and market sentiment. Individual retail investors usually don’t get information as quickly as institutions or analyze as deeply as professionals. If you jump in blindly and chase momentum up and down, there’s a good chance you’ll end up being the one who gets burned. So the first hard rule is simple: control your impulses and don’t treat the stock market like a casino.

If we’re not playing for adrenaline, then what are we doing? We’re investing for the long term. No matter how much capital you have right now, the best strategy is often to keep it simple: choose quality assets and hold them. Let time and compounding do the heavy lifting instead of trying to profit from constant buying and selling. Most of us have full-time jobs—who has the time to stare at candlestick charts every day? Rather than exhausting yourself studying financial statements and still making mistakes, it’s often better to choose a higher-probability path that saves time, reduces stress, and helps you sleep at night. To make this “lazy investor” approach easier, I’ve summarized three beginner-friendly stock-picking directions that don’t require watching the market all day:

  • Strategy 1: Stick with broad market indexes. Buy index ETFs like the S&P 500 or Nasdaq and get one-click exposure to the US market. This is the easiest approach.
  • Strategy 2: Focus on large-cap stocks. Choose only giant, well-known companies with massive market caps.
  • Strategy 3: Follow hard numbers. If you really want to pick stocks yourself, focus on financials, profitability, and cash flow—not stories and hype.

Simply put, the goal is not to become a trading guru. The goal is to be a smart “lazy investor.” Get your mindset right first: don’t aim for overnight riches; aim for steady progress. For most people, pursuing stable compound growth is the simplest way to benefit from the stock market. The power of compounding comes from earning returns on your returns—the longer the time horizon, the more dramatic the result.

  • Compound returns grow exponentially, which is why they can be so powerful. Your total assets = (1 + annual return)^N, where N is the number of years.
  • For example: invest $10,000 at a 10% annual return. In the first year, you earn only $1,000, bringing the total to $11,000. In the second year, that $11,000 earns another 10%, growing to $12,100. Keep that up for 30 years, and $10,000 becomes $174,000—more than 17 times your original investment. That’s the power of compounding.

Next, let’s break down exactly how to use these three strategies. For stock-screening tools, I recommend the screener in the Moomoo APP. It includes a wide range of metrics, and once you set up your filters, you can save them and revisit them from time to time to see whether any new stocks meet your criteria.

Right now, Moomoo is offering a limited-time Lunar New Year promotion: if you register through our exclusive link, any deposit qualifies you to receive a $100 Amazon gift card. If your deposit meets the requirements, you can also earn up to $1,000 in NVDA. Idle cash can earn 8.1% APY. Be sure to register and fund your account through my link to qualify for these offers. Also, the extra $100 Amazon gift card is limited in quantity and available on a first-come, first-served basis.

Strategy 1: Follow Broad Market Indexes (Best for Beginners)

This approach works for the vast majority of beginners. The core idea is simple: if you can’t beat the market, become part of the market. As Warren Buffett famously said, “By periodically investing in an index fund, the know-nothing investor can actually outperform most investment professionals.” First, let’s look at the three core US stock market indexes. If you’re bullish on the long-term fundamentals of the US economy, owning ETFs that track these indexes is one of the simplest and most efficient choices.

The advantage is clear from historical data: long-term holding of major US stock indexes has delivered very strong returns, often outperforming most actively managed funds. In other words, it can be a simple “buy and hold” path to steady growth. You don’t need to understand complicated candlestick charts, and you don’t need to worry about one company suddenly blowing up, because buying the index means buying broad market exposure. As long as the US economy continues to grow over the long run, your account should generally grow with it.

How to Do It

Using the Moomoo APP as an example, here’s how to invest in index ETFs.

Don’t be intimidated by all the ticker symbols—buying index ETFs on Moomoo is actually about as simple as online shopping:

  • 1. Find US ETFs: tap Market → ETF → Index ETF → choose the ETF you want to invest in → compare its annualized return and fees.
  • 2. Review the details: after tapping into the ETF, you can see its price trend, holdings details (which companies it owns), and fee ratio for comparison.
  • 3. Place your order: tap the “Trade” button in the lower-right corner, enter the amount you want to invest (for example, $100), choose a “market order” (executes immediately at the current market price), and then click “Submit” after confirming everything.

Things to Keep in Mind

If you plan to hold for the long term, you don’t necessarily need to buy the most popular core index funds like QQQ or SPY directly. Their management fees are relatively high, and you can choose similar alternatives with lower expense ratios. Of course, those alternatives are also very large funds, so individual investors generally do not need to worry about liquidity. I used GPT to generate a comparison, and you can also ask AI directly to learn some of the basics.

The reason to choose lower-fee products is also tied to compounding. For example, if you invest $100,000 in SPY versus VOO and assume a 10% annual return, buying VOO could earn you an extra $2,294, equivalent to 1.0134x the total return.

Strategy 2: Focus on Large-Cap Stocks (Best for Investors Seeking Stability)

Large-cap stocks are generally stocks with a market capitalization above $10 billion. Examples include Apple (AAPL), Berkshire Hathaway (BRK.A), and oil and gas giant Exxon Mobil (XOM). The exact cutoff is not especially important here—the main idea is simply companies with very large total market value. In Moomoo, I screened the market and found 1,378 stocks with market caps above $10 billion, and 156 stocks above $100 billion. The advantages of choosing large-cap stocks are pretty obvious.

  • Stable operations: they usually have mature business models, strong competitive moats, and better risk resistance.
  • Transparent information: because they are market bellwethers, their earnings reports and news disclosures are typically extensive and easier for investors to analyze.
  • Generous dividends: many large-cap stocks are well-known “dividend aristocrats” that can provide stable cash flow income.
  • Lower volatility: During periods of market turbulence, capital often flows into high-quality large-cap stocks as a safe haven.

Large companies also tend to be in the news more often, so you’ll usually see and hear about them regularly, which can make them feel more familiar and comfortable to own. Their growth rate is often slower than that of small-cap value stocks, and their volatility is usually lower as well. Especially during volatile market periods, large-cap stocks often fluctuate less because investors prefer quality and stability while avoiding risk.

If you really don’t have a strong preference, you can simply choose a large-cap stock you like and feel optimistic about, buy it, and hold it for the long term. One thing to keep in mind is that even large-cap stocks can drop sharply in the short term, especially if you bought at a high valuation. But over the long run, the market dominance, profitability, and moat of these companies can support steady long-term returns.

Practical Guide

Here we’ll continue using the Moomoo APP as an example to show you step by step how to find large-cap stocks. You can use Moomoo’s stock screener to easily set different filters:

1. Find large-cap stocks: Tap Market → U.S. Stocks → Stock Screener → Set filters: U.S. stocks, market cap > $100 billion → 157 large-cap stocks

2. Use Moomoo AI: You can ask Moomoo AI about opportunities and risks.

Moomoo AI is moomoo’s large-model AI feature. Unlike other models on the market, it has access to the latest real-time data that can be pulled at any time. It can analyze a stock from multiple angles, including fundamentals, technicals, capital flows, and news/hot topics. It’s very comprehensive—basically like turning a Wall Street analyst into your 24-hour personal investing assistant.

Strategy 3: Screen Stocks by Metrics (Best for intermediate investors with some experience)

If you don’t like following the crowd and don’t prefer big companies, using different metrics to screen stocks is also a great option. After decades of development, the U.S. stock market now has all kinds of metrics that can be used to measure a stock’s profitability, stability, risk level, competitiveness, and valuation. Based on your own investing preferences, you can set different filters and quickly find stocks that fit your style. That said, it’s still recommended to focus on stocks with at least some scale.

Here are some commonly used stock-screening metrics. You can choose and filter based on your own preferences.

  • Metrics for high growth: Return on Equity (ROE), Return on Assets (ROA), Return on Invested Capital (ROIC)
  • Metrics for stability: Dividend Yield, Price to Free Cash Flow
  • Metrics for cheap valuation: Price to Earnings ratio, Price to Revenue ratio, Price to Book ratio
  • Metrics for strong competitiveness: Gross Margin, Operating Margin, Net Margin
  • Metrics for lower risk: Debt to Equity ratio, Current ratio, Quick ratio

You can also directly use the various metrics available in the Moomoo APP stock screener. This screener is a proprietary smart stock database built by Futu’s product development team, with data synchronized in real time from major global stock markets. To make the screener more accurate and efficient, Futu’s product team created 100+ advanced screening factors to evaluate stocks across dimensions such as industry sectors, market indicators, financial metrics, technical indicators, and market performance. In actual use, investors can enter the criteria they need and screen stocks with one click to make decisions more efficiently.

  • Select Search
  • Then tap Stock Screener
  • Then filter based on the metrics you’re interested in. If you’re not sure about the range, you can directly use some of the default ranges provided by Moomoo

Since all of this data comes from company financial statements, the power of the screener also shows that Moomoo makes strong use of financial-report data behind the scenes.

Summary

Stock selection is the first step in U.S. stock investing. If you’re not especially confident, you can first screen a list of stocks, follow them daily, and wait to buy when the price looks more attractive. If you’ve never bought stocks before, it may make sense to start with the three major indexes or some large-cap stocks you’re interested in. Once you become familiar with different metrics, you can start screening based on them. As for technical-analysis terms like bearish signals or golden crosses, you can learn those gradually over time.

About Moomoo

Moomoo is currently offering a limited-time Lunar New Year promotion: if you register now through our exclusive link, any deposit can earn you a $100 Amazon gift card. If your deposit meets the requirements, you can also get up to $1,000 in NVDA. Idle cash can earn 8.1% APY. Be sure to register and deposit through my link to qualify for the offers above! Also, the extra $100 Amazon gift card is available in limited quantity on a first-come, first-served basis.