Long-term, buy-and-hold investing has shown to be one of the most profitable ways to invest. Holding stocks for a long time allows compounding to work its magic to deliver massive returns and defers capital gains taxes that would otherwise reduce your income. But the stocks ideal for investing change along with the market. So what are the 3 stocks to buy now in this market volatility? Let us find out.
2021 has been a year marked by shifting investment themes. Ideally, an investor should have a diversified portfolio with exposure across a wide variety of sectors and assets. While there will always be a trending trade, it is crucial to hold a solid core portfolio that can withstand all sorts of economic conditions, including volatility.
Analysts have divided the market into multiple sectors. Investing in stocks across various sectors makes any portfolio more diversified and resistant to market shocks. Before investing, you have to check for metrics like beta or average movement relative to the indexes. It is also essential to consider what industry or niche the company you are considering belongs to.
With the above considerations in mind, buying the below three stocks may reduce the strain on your portfolio in turbulent times.
3 Stocks to Buy Now in This Market Volatility
1. Spotify (SPOT)
Spotify Technology currently dominates the global market for subscription music streaming. The streaming music and podcasting platform added 7 million paying subscribers in the June 2021 quarter, ending the period with 165 million premium subscribers worldwide. Three months ago, Spotify predicted it would add 6 million new subscribers, based on the midpoint of its outlook.
The firm also reported 365 million total monthly active users, up 22% year over year. However, analysts were looking for 371 million monthly active users in the quarter. Apart from a paid tier, Spotify offers an advertising-supported service.
In a letter to shareholders, Spotify said that "Covid-19 continued to weigh on our performance in several markets, and, in some instances, we paused marketing campaigns due to the severity of the pandemic. Overall, we saw a return to better growth patterns in the back half of the quarter."
Spotify is making substantial investments in exclusive content, both with popular music and in the podcast space. Recent additions to Spotify's podcast hosts include pop star Taylor Swift, comedian Joe Rogan, and the duo comprising rock legend Bruce Springsteen with former President Barack Obama.
These premium content creators helped Spotify increase its revenue in the first quarter. In addition, the platform plans to continue to pull in new customers in the coming quarters, making now the best time to buy SPOT stock.
2. Walt Disney (DIS)
The Walt Disney Company is a global entertainment firm that operates a broad range of businesses, including resorts, theme parks, cruise lines, broadcast TV networks, etc. Disney also produces live entertainment events apart from producing and streaming a wide range of film and TV entertainment content through its relatively new digital streaming services.
Disney has spent several years developing and acquiring industry-leading intellectual property, including goldmines like Lucasfilm and Marvel Entertainment. It uses these platforms to create original content and build a competitive moat for its streaming platform.
In January, the finale of Disney+'s flagship original series The Mandalorian, based on the Star Wars cinematic universe, helped propel the platform to the top of Nielsen's weekly streaming charts. This success demonstrated the power of Disney's brands and the built-in audience its original content can command. In addition, Disney+ also has multiple Marvel-based series like WandaVision, Loki, and Assembled, which all launched in 2021.
With a notable price-to-earnings (P/E), Disney stock is not cheap, especially considering that the company's second-quarter revenue declined because of the COVID-impacted amusement park business, which is still down over 40% against the prior-year period.
But Disney stock is a bet on the firm's future, which looks bright because of its competitive advantage in streaming. Disney+ boasts 103 million subscribers as of the fiscal second quarter (up from 33.5 million in the prior-year period). Disney's management expects this number to surge to between 230 million to 260 million by 2024.
Buying Disney stock now has a high chance of doubling your investment in the long run.
3. Tesla (TSLA)
There is no question as to whether Tesla has been a good buy up to this point. After going public at $17 a share in 2010, Tesla is now trading above $684 per share. Even though it is trading at a high market capitalization right now, shares were even more expensive a couple of months ago. The share prices peaked at $900 in January and have dropped by a notable margin since then.
Tesla recently reported that it delivered 201,250 vehicles in the second quarter of 2021, up from the prior record of 184,800 in the first quarter. Deliveries soared 120% from the year-ago period. Tesla plans to build its first Model Y vehicles in Berlin and Austin in 2021. But the company said that its semi-electric big-rig truck would not arrive until next year. It also suggested the Cybertruck may not start coming off the assembly line until 2022, making now an excellent time to buy Tesla stock as it is beaming with potential.
Additionally, Tesla not having offered dividends in the past is yet another positive note for the increase in its value. Even in the near future, it has no plans to offer them. This indicates that over time, its shares are most likely to appreciate value. Hence, there is a good chance that Tesla stocks could provide a good return for its investors in the future.
Investing in stocks is no easy task. But, with some assistance and thorough research, novice investors can double their investment by choosing the right assets. If you are looking for the top 3 stocks to buy in this market volatility, keep the points mentioned above in mind.
The stock market can be highly volatile at times. Investors are advised to be patient and perform due research before investing.
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