We are in a great period of time to invest. There are many opportunities to do so since most of the emotions in the market’s declines lately have been due to crude’s decline. Now that there has been a temporary support, investors all over the world are a little more at ease to transfer their bond and treasury holdings into equities or stocks.
I am going to introduce four companies that I strongly suggest investing in and reasons for investing in them as of February 9. I understand this article is printed on February 17 but the progress of these investing picks will be as of February 9. I still suggest you follow along as of February 17 if you have residual income or savings you do not know what to do with. Note that I am myself invested in these four companies, thus, I am putting my money where my mouth is.
If my picks increase in value over the semester, so does my bank account and vice versa. If my stock picks do poorly this semester, then I have less available.
Below will be a summary and a five year chart for each of my picks showing you where I am entering the positions. Each week, I will update the progress on each of the four picks and total net gain or loss. This is strictly a buy and hold until the last day of the semester. I will not add or deduct any shares from any position and any dividends I receive from the holdings will be re-invested into the holding.
A dividend is when a company sends a holder of its publicly traded shares as a thank you for holding. Each company varies in amount but most S&P500 companies issue between 1 and 4 percent dividends of your stock holdings. Thus, for this reason, I will be intuitively picking companies that not only are below personal market value (or at least what I feel are below), but also issue a good dividend.
The first stock I will discuss is Johnson & Johnson. The quote for Johnson & Johnson is JNJ. They are a major household name that everyone purchases. Their products are in every Walmart, Target, drug store and grocery store. They are famous for products including Tylenol, Neosporin, Band-Aids, Listerine, Aveeno, and tooth brushes. Their products are purchased regardless of the state of our economy. If we are in a recession, people will still purchase their products because they need mouthwash to brush their teeth and bandages to cover up their cuts. They have brand following, brand recognition and are right near the $100 mark. Their stock price almost hit $110 twice in the last twelve months and pay 2.77 percent dividend or $0.70. This means that I will be receiving $0.70 every three months multiplied by the amount of shares I own.
The second pick is Alibaba. Their quote is BABA and is famous for their online merchant website that almost all of Asia purchases through. Their company is based in China, which is a possible long term issue because of government controversy. But they still have incredible sales and potential for growth. Their initial public offering (IPO) was at the mid $80 range and shot up to over $100 a couple of months ago. Recently, their price has declined to the mid $80 range and my reason for investing in the stock. My third pick is Facebook (FB). More people are using Facebook than ever. Their database of user information is a major attraction for companies to advertise. They have monetized their platform and software and have almost no competition in the online social realm. They snatched up Instagram to attract famous people and companies to advertise products to all ages. The closest competition is Twitter and they do not even exist in the same social media market. Facebook stock is currently at $74 and used to be at $81 a few months ago. My final pick is Macy’s Inc (M). They issue a $0.31 dividend per share owned or 1.70 percent of holdings per quarter every three months. My reasoning for Macy’s Inc is there steady up trend since 2007. Although most major companies have been rising since 2007, Macy’s Inc has distinguished itself as a brand loyal company along with returning customer sales. This means the average consumer who purchases clothing or shoes at Macy’s returns to purchase more. Their current price is $63.50 and is at a 6 month low. Below is a summary of my four picks along with price.
Each week I will include an update on each company with overall gain and loss.
Lillie Muyskens | The Houstonian
I'll give the author JNJ, if you can afford to buy into that one, then sure, but most people starting out $100+ per share doesn't go very far when you're trying to diversify. Other than that, JNJ is basically a "forever" stock, like coke and Disney.
Alibaba, I wouldn't recommend that as a beginner stock for someone for the reason you stated. Beginners need foundation stocks, something they can understand and see on a daily basis (do not monitor your stocks daily on the fluctuation, you will lose your mind), and China is just in another world.
FB? Again, I don't know. Studies show that the younger generations are already abandoning it. The reason? It's primarily used by their parents, those that had just started college when it was released, or high school when it made that leap. It's not cool to use what your parents use. So the question is, how long will our generation sustain FB? Or will it branch into other areas? At $74 I'm not sure how much upside it has over the long run, maybe over the next couple years, but I don't see it hitting 90 unless something crazy changes, so a questionable upside, and a whole lot of down side.
Furthermore, the market woes; while primarily based on oil price in that industry, many of the other sectors keep sporadically reacting to the situation on Greece and abroad as well. Don't sell your readers short on that, they have to pay attention to everything.
I just reinforced with HAL at $40 (44 today), that may or may not have been the bottom, but there is a far great upside over the long run than down, even if they dive to 30, which I'd go on record now saying won't happen.
Oxy is always solid, especially at the current price of 82. Don't want oil? Look at places like coke, att, mcdonalds, and so forth.
If you've read this far, look into ETF's as well.
Also, "great period of time to invest," for now, there really isn't much of a sign of a break in it, however, it's soaring at a fast pace, and many companies are trading well above their value. It may not take much for an abrupt turn around. While sitting out is leaving money on the table, that sentence you used is a bit misleading. Attention to conditions is critical. Hopefully the peak keeps pushing a while longer though.
Matt, take a look at US Treasury Bond Yields and how they have come down the last couple of years. In general a low yield market on bonds is good for uptrends in equities. I disagree with your view on Facebook usage declining. They are a powerhouse and dominate social media advertising and connecting businesses to consumer. And as for your argument on Greece, their GDP is the size of Dallas, Texas.......Greece getting a lifeline or not (although as of today they have received another couple months of extension on debt payback) is a short term effect. Imagine saying this: If Rhode Island files bankruptcy will the United States feel it? NO! Same for Europe. I don't understand why you don't feel Alibaba is a good buy. They have insane amount of revenue and are growing. China may be in a downturn right now but when a dominant company like Alibaba is down 25% it's a bargain. BABA is watchable and is commonly found in the news. Your view on it being in another world is an opinion, not a fact.
I'll give the author JNJ, if you can afford to buy into that one, then sure, but most people starting out $100+ per share doesn't go very far when you're trying to diversify. Other than that, JNJ is basically a "forever" stock, like coke and Disney.
Alibaba, I wouldn't recommend that as a beginner stock for someone for the reason you stated. Beginners need foundation stocks, something they can understand and see on a daily basis (do not monitor your stocks daily on the fluctuation, you will lose your mind), and China is just in another world.
FB? Again, I don't know. Studies show that the younger generations are already abandoning it. The reason? It's primarily used by their parents, those that had just started college when it was released, or high school when it made that leap. It's not cool to use what your parents use. So the question is, how long will our generation sustain FB? Or will it branch into other areas? At $74 I'm not sure how much upside it has over the long run, maybe over the next couple years, but I don't see it hitting 90 unless something crazy changes, so a questionable upside, and a whole lot of down side.
Furthermore, the market woes; while primarily based on oil price in that industry, many of the other sectors keep sporadically reacting to the situation on Greece and abroad as well. Don't sell your readers short on that, they have to pay attention to everything.
I just reinforced with HAL at $40 (44 today), that may or may not have been the bottom, but there is a far great upside over the long run than down, even if they dive to 30, which I'd go on record now saying won't happen.
Oxy is always solid, especially at the current price of 82. Don't want oil? Look at places like coke, att, mcdonalds, and so forth.
If you've read this far, look into ETF's as well.
Also, "great period of time to invest," for now, there really isn't much of a sign of a break in it, however, it's soaring at a fast pace, and many companies are trading well above their value. It may not take much for an abrupt turn around. While sitting out is leaving money on the table, that sentence you used is a bit misleading. Attention to conditions is critical. Hopefully the peak keeps pushing a while longer though.