The Financial Stocks I'd Buy First if I Were Starting a Portfolio Today

If I were building a portfolio from scratch today, the financial stocks I'd buy first would be Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) and Robinhood Markets (NASDAQ: HOOD). One brings ballast when markets get choppy, while the other offers long-term growth potential that could beat the market. Here's why they're at the top of my list.

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Berkshire Hathaway

With Warren Buffett having stepped down as CEO, investors are asking what changes will come for Berkshire Hathaway. I don't think much does. Buffett already did the hardest part: turning a struggling textile mill into one of the most valuable companies on the planet.

New CEO Greg Abel is taking over a business that already owns dozens of durable operations, from insurance (like GEICO) to consumer brands (like See's Candies). Together, these businesses generate about $45 billion a year in operating cash flow.

Abel also proved himself by transforming Berkshire Hathaway Energy into a powerhouse as CEO from 2008 to 2018, demonstrating his operational skills. Importantly, the playbook of buying quality assets when they are available at attractive prices will not change. Buffett built this culture of disciplined capital allocation, and I expect Abel to keep that approach intact.

At the end of the second quarter, Berkshire held $360 billion in cash and short-term investments and nearly $324 billion in equities, including large stakes in leading companies such as Apple and Coca-Cola. The stock has kept pace with the S&P 500 over the past decade, but with smaller drawdowns during market corrections. I expect Berkshire to deliver a similar performance over the next decade.

Robinhood Markets

Robinhood became a household name over the last decade by bringing free trading to the masses and forcing the big brokerages to match it. But it's no longer just a discount trading app. Under founder and CEO Vlad Tenev, Robinhood is trying to become a full financial services platform that combines trading, planning, and modern technology -- and the execution has been impressive.

In just the last two years, the company has rolled out Robinhood Banking, a credit card, event contracts, agentic AI trading, wealth management, tokenized equities, and even a proprietary blockchain (Robinhood Chain), with more still coming. Management is executing at a high level, and the results are showing up in the financials.

On a trailing-12-month basis, revenue has more than doubled since Q2 2024 to nearly $5 billion. Net income is up more than 600% to almost $2.1 billion. Robinhood now has $369 billion in total platform assets across more than 28 million funded accounts. It's attracting customers, but it's still small compared with the largest brokerages that custody trillions.

The stock isn't cheap at 38 times forward earnings, but the growth has been strong enough to justify a premium. Most importantly, Tenev has proven he can execute at a high level while continuing to innovate. If Robinhood keeps launching new products and expanding its ecosystem, it could have a long runway over the next 20 years.

John Ballard has positions in Berkshire Hathaway and Robinhood Markets. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.