Everyone seems to be buying stocks right now—history says you shouldn’t. Unless you are trading on insider information or a stock picking whiz, investing your money in this current economic environment seems frowned upon at best. If there is anything that I have learned from the start of the pandemic it is that the best time to buy is when everything is bad—the market is interesting in that way. When people are typically strapped for cash and need to pay their bills, the stock market tends to be the best place to put their money and when everything is going well and the market is reaching new highs, people are dumping their savings into the market. We are in the ladder phase.
Incentives
I understand wanting to put your money in the stock market; all the incentives tell you to! Companies are earning more than Wall Street projected and we are said to be in the recovery stage of a global health crisis. However, the current state of the stock market scares me.
I have personally sold a sizeable amount of my portfolio and put the proceeds into my bank account. I plan on buying silver and other precious metals to protect myself.
Stocks to Weather the Imminent Storm
However, If you are still determined to buy stocks today, below is a list of some of the companies I currently own stock in that I think are best equipped to handle what is coming (and potentially profit).
(NOTE: This list is in no particular order)
- Microsoft (MSFT)
- Apple (AAPL)
- Facebook (FB)
- Coca Cola (KO)
- McDonald’s (MCD)
- Dollar General (DG)
- Walmart (WMT)
- Berkshire Hathaway (BRK.B)
- Kroger (KR)
- Target (TGT)
Before discussing the stocks I currently have in my portfolio, AMZN, GOOGL, and CMG would be at the top of the list; I just don’t own any stock in those companies (too expensive).
Grocery Stocks
If I am bullish on anything, it would be grocery stocks like Kroger, Walmart, Target and even Dollar General. The price of groceries has been on the rise (Infographic: A Decade of Grocery Prices for 30 Common Items (visualcapitalist.com) and these companies have been expanding aggressively during COVID. Companies like these (especially Kroger, Walmart, and Target) will benefit from an increase in the price of groceries.
.jpg)
Dollar General will profit from people still needing everyday items (including groceries) at a relatively low cost. Needless to say, these companies are iconic American brands that are well positioned to handle whatever mayhem lies ahead.
Food and Beverage Stocks
I am bullish on the food and beverage industry titans Coke, and McDonald’s, and Chipotle because of their history; these companies tend to perform well during periods of economic trouble. As I alluded to in the first article, a thought that tends to enter my mind before I invest in a company is “no matter how bad the economy gets, will people still need or use this company’s services?” The answer for all three is yes.
Tech Stocks
As for tech giants Microsoft, Apple, Facebook, Amazon, and Google, they are the classic “essential” stocks. I am using Microsoft Word to draft this article, I used Microsoft Teams for my classes a few semester ago, I use Google to look up articles and I use Amazon to buy books on economics and finance. All of my friends use Facebook (and you likely do too).
It seems fair to assume that the products and services of these companies have become so inundated in our lives that they won’t leave anytime soon.
This brings me to one of[LM1] my favorite stocks on this list; a little company managed by Warren Buffett called Berkshire Hathaway.
The Berkshire Safety Net
In the transportation sector, Berkshire Hathaway (BRK.B) owns one of America’s most iconic railroads, BNSF.
Regarding comfort food the world will continue to crave, they own Dairy Queen.
Berkshire also owns many other longstanding American brands such as Duracell, GEICO, Fruit of the Loom, NetJets, and is in the process of acquiring Flying J.
Needless to say, Berkshire’s portfolio does all of the diversification for you.
Conclusion
Overall, I hope it is clear that this article is for someone who wants to put money into the market. The best thing to do right now (in my opinion) is to keep cash and stay on the sidelines or invest in physical silver or gold.
I have to admit that it is quite tempting to put your money in stocks when you keep hearing about record high prices, but people were also tempted in ’07 and the ‘01 tech bubble. Greed kills.
If you have any questions or thoughts please feel free to reach out by emailing macrohint@protonmail.com or fill out the form on our Contact page.
Stay informed and take the hint