In this consistently evolving competitive landscape, one of the best ways to get good returns is to invest in stocks. For investors who want to make a passive income, dividend stocks are always an option. It can earn a yield of 3% and a higher rate compared to other savings accounts. Being an investor in the stock market has its benefits as well as risks. Choosing the best stocks to buy is indeed a nail-biting decision that should be backed up by reliable and robust research recommendations.
Tips For Choosing The Best Stocks To Buy Now
Though the popularity of exchange-traded funds (ETF's) has downsized individual stock buyers and their market, the stock market still can be a successful investment project with some good research. Whatever your trading style is, be it day trading or even styles like swing trading, position trading, or investing, there should be a particular criterion for choosing your stocks.
Here are few golden rules and tips to choose the best stock in the market.
Plan For A long Term Investment
No matter what the current scenario is, the investment plans should always be for the long haul. Before investing in a particular firm, analyze its history by reviewing its dividend payouts, cash flow, and trading performances. The history might not be a reliable gauge for future performance, but it can create an outline for a good start.
Keep Capital Preservation The Ultimate Priority
Stock investment and trading are not a gambling game of guess. Rather, it needs a particular plan and research. Preserving the capital and minimizing risk should be of utmost priority while investing in a stock. It would be best if you had a clear cut idea of how much money you can afford to lose and how to pick stocks accordingly for the long term. Staying in the game and preserving capital is one of the most critical objectives.
Plan On Risk Management
Determine the level of risk you can afford and live with. Focus on preserving capitals and always kick-start by minimizing risks. Once your skills and experience in the field increase, gradually, you can consider expanding the risk based on the stocks you pick to trade.
Best Stocks To Buy Now In The Market
As the entire world anticipates what the "new normal" holds for us, it is crucial to consider past trends, the present market, and several other factors while choosing your desired stock market. Here are some of the best stocks that boast impressive relative strength compared to others that can perform well in this market.
FMCG Sector (Fast Moving Consumer Goods)
British American Tobacco and Imperial Brands are the best and fast-moving consumer goods firms (FMCG) that top the list of best stocks to buy now. These are two smoking companies that offer over 7% yield, despite the fact that tobacco sectors are out of favour with investors. This is quite impressive as well as a tempting ground to reap the benefits of stock investments.
Unilever Ltd, the overlord of FMCG, engaged in manufacturing branded and packaged products, is yet another flourishing stock to consider. Unilever has a dividend yield close to 3.5%, which is in this current low-interest-rate economy, very enticing and cajoling. Being an all-time expensive stock, sudden market disruptions can also offer opportunities to pick up shares cheaper than usual.
The soft drink supplier Britvic and alcoholic beverage company Diageo are two other FMCG companies that can be categorized under the best stocks to buy title. With an enticing yield of over 3.5% and a history of flourishing performance, Britvic has a market infused with many opportunities for investors. On the other hand, Diageo has a low yield comparatively, which is close to 2.5%. But their dividend growth track record is up to the mark to turn it into a considerable stock to buy.
Technology behemoths like Facebook, Netflix, Google, and Apple initially dominated the sector and became household names in the stock market. Several investors saw certain growth potential in these budding enterprises, and it still is one of the best options for investors.
According to Netflix's latest earnings report, the Netflix stock has been boosted dramatically and there has been a spike in its relative strength which is indeed an influential factor.
Despite implementing a price hike, Netflix has added 860,000 new subscribers in the U.S. and Canada in the quarter of December, and the firm ended with a starking 203.7 million subscribers worldwide in 2020, turning it an ideal ground for stock market investments. Wells Fargo analyst Steven Cahall said in his note to clients that, "We've gone from a historical bear on NFLX to a card-carrying bull."
The tech giant Apple (AAPL) became the first U.S. company with a market cap exceeding $2.3 trillion in January 2021. Despite the pandemic sweeping the country, the iPhone maker's share managed to have a leap of more than 50% this year, making it an ideal choice for investors to prioritize their capital and make passive income alongside.
By leveraging digital transformation benefits, global finance sectors are scaling their growth with particular services like banking, investing, and insurance. Be it Intuit. Inc (INTU) with its solution to make seamless and affordable tax filing or Mastercard (MA) that harnesses the benefit of a growing cashless society. These brands are poised enough to maintain a stable and continuous market throughout, even amidst chaos.
Conclusion: The Boon And Bane
After the pandemic's havoc, markets are predicted to make a recovery, and stocks are showing a positive sign of rising, which makes it an ideal time to invest in the stock market. Risks are destined to be involved in stock market investments, but despite the risks, these mentioned stocks are some of the best stocks to buy now to boost your passive income for this year and the coming years.
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