“An investment in knowledge pays the best dividend."
When it comes to investing, nothing will pay off more than educating yourself. The stock market returns the best value to those who have knowledge, patience, and discipline.
It’s not possible to time the stock market consistently. Every now and then some analysts get this right and they become the experts; don’t waste time to get the market trends right but always stay in the market with high-quality names. If you don’t have the time and the expertise to choose big names, at least do index funds to enjoy the average market gains. Avoid high fees actively managed funds, only buy high quality index funds if you want to be very conservative and cautious in the market. Most people have no clue about the fees structure of their mutual funds. They only see the expense ratio as the only fee associated with the fund. On average, regular mutual funds cost you around 2.5-3% in different kinds of fees, according to the book “Unshakeable" by Tony Robbins. Some people may argue that 2-3% is not that of a big deal but if you leave this in your retirement funds for 20-30 years, it comes up around $60-80K more money from your pocket as compared to high-quality and low expense index funds.
BEST INDEX FUNDS:
VTSAX
VMVAX
VTI
VFINX
VIGAX
I personally believe younger folks need to take a little bit more risk and also buy high quality stocks in whatever market they are in. As you come closer to retirement, you can go heavy on index funds.
Below are some names I like especially in the times of increased capital spending by the U.S. Government to upgrade their infrastructure.
Infrastructure Play: There are some high-quality names that can benefit if the U.S. approves their massive infrastructure spending bill. It’s hard to put one name that will benefit the most from the spending spree. Even though some of these names have gone up more than 100% from the last time recommended about a year ago like “United Rentals”(URI) and MLM. I still like these two along with STEEL DYNAMICS (STLD), CLIFF NATURAL RESOURCES (CLF), and NextEra Energy (NEE).
Alcoa Corporation (AA): Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum.
Danaher Corporation (DHR): Danaher Corporation is a Washington, D.C.-based science and technology innovator that currently has a $219.3 billion market capitalization. DHR delivered a 38.33% return since the beginning of the year. Life science and diagnostics company Danaher (NYSE: DHR) is one of the big winners from the COVID-19 pandemic. Its diagnostic tests help detect the coronavirus, and its life sciences tools help medical bodies research and develop vaccines and therapies for it.
Invest in Water: There is no doubt that water is the most precious commodity on this planet. Smart long-term investors taking positions in water conservation and recycle companies and the two best names I like are XYLEM INC (XYL) and Watts Water Technologies, Inc. (WTS). I have recommended XYL in the past and since that, this stock has gained more than 80% in the last 2 years. I still like this sector and these two names can be great picks to own with any pullback. Both of these names are close to 52 weeks high.
Semiconductors: With the continuing shortage of semiconductor chips, a few names should be in every savvy investor’s portfolio. Big names like NVDA, AMAT, AMD, and KLAC are proven names with great growth potential, but I also like small to medium caps like ON Semiconductor (ON). ON primarily focuses on the automotive sector and develops chips for new automobiles.
HIGH-RISK/HIGH-REWARD STOCKS: For people who like to take more risks in the market can do some research of their own on these names. I never put more than 10% of my portfolio into high-risk names. Keep these stocks for at least 3-5 years.
DiDi
OLO
NVAX
SOS
WISH
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