- (1:10) - Limiting Risk With Diversification
- (8:45) - Stocks To Keep On Your Radar: Buying Back Into The Market
- (20:00) - Episode Roundup: VOO, TWTR, PEP, KO, MCD, SBUX, SNE
Welcome to Episode #218 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo from her dining room, once again, as everyone in Chicago is sheltering-in-place due to the coronavirus.
The world has turned upside down.
The kids are home from school. Social distancing is the norm. Some are hunkering down in their homes with little contact with the outside world.
Everyone is under stress. There’s lots of anxiety.
And then there is the stock market, which has fallen into a bear market, but is still staging wild gyrations, both up and down, with no end in sight.
Taking Control Through Your Investing
It might seem counter intuitive, with stocks so volatile, that investors might be able to find some semblance of control by executing an investment plan.
Josh Barro recently wrote an article for New York Magazine titled “How a Riskier World has me Rethinking Investment Risk.”
He is not near retirement, yet he sold a third of his stock mutual funds at the beginning of the stock market panic earlier in March.
He promptly put the money into bonds, where it was then pummeled.
But he said he still felt better because it allowed him to assert “control” over something in the world which otherwise seemed scary.
In this case it just happened to be his investment and retirement accounts.
Could the same thing work for others?
Nibbling on Stocks
If you are keeping your job and have some cash, why not follow his lead and assert some control by nibbling on a few stocks?
Control doesn’t have to be about selling. It can also be about buying.
This may not be the bottom of the sell-off. Or maybe it is.
But no one can time the bottom perfectly, so why try?
Instead, ease back into it.
5 Big Cap Stocks That Have Sold-Off
There are a lot of stocks that people consider to be their “favorites.” Nearly everything has sold-off.
1. Pepsico (PEP - Free Report) is hiring 6,000 people due to high demand during the crisis. It’s now trading with a forward P/E of 18 and pays a dividend yielding 3.6%.
2. Coca-Cola Company (KO - Free Report) is suspending production in India, which has now gone on lock down, and its closed its Costa Coffee chain in the UK. But it’s trading with a forward P/E of 17.3 and pays a dividend yielding 4.4%.
3. McDonald’s (MCD - Free Report) has closed all restaurants in the UK and Ireland but is still operating drive-thru and carry out in the United States. It’s trading with a forward P/E of 16 and pays a dividend yielding 3.7%.
4. Starbucks (SBUX - Free Report) has already made it through the shut down in mainland China where over 90% of its stores have re-opened. This has given them a good road map on what is likely to happen in the US and Europe. It has a forward P/E of 20 and pays a dividend yielding 2.9%.
5. Sony (SNE - Free Report) could benefit from the increase in gaming. While Playstation 5 is set to launch later this year, Xbox is reporting almost holiday-like demand right now. It also has a strong studio and music divisions which could benefit. It’s trading with a forward P/E of just 12.5 and it pays a dividend yielding 0.5%.
What else do you need to know about taking control during the coronavirus crisis?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of SBUX in her personal portfolio.]
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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