Adnan Rafique M.D.
The stock market remains very volatile and scary for most investors. People looking for short-term investment continue to feel disappointed and fatigued by a lackluster portfolio.
On the other hand, long-term investors are busy making strategies to pick up the best companies at discounted prices and stay in the market for long-term gains. investors have historically experienced a much higher success rate over the longer term.
Historically, these short-term blips in the market have given smart and patient investors the opportunity to build wealth if they recognize the right companies with great business models and cash flow to weather these kinds of storms.
No one can predict the short-term trends in the stock market, don’t listen to people who are very negative or overly optimistic about the market. Read and pay attention to the fundamentals of the businesses and decide which companies are worth keeping in your portfolio for the next 5-10 years. I personally don’t invest in the past and present, I like to invest in the future. These can be companies that have built enormous products in the last 10-20 years and continue to innovate and these companies will remain the leaders in future technology and services.
Another important step to take in this environment is to teach your kids the importance of long-term investment and how to take advantage of negative sentiment in the market. Helping them build their own portfolio, especially Roth IRA investment can be extremely beneficial for younger investors who can see huge upside in the next few months to years. The entire gain in their Roth IRA portfolio will be tax-free and due to the enormous power of compounding, they will be able to build wealth much faster than those who take no action at a younger age. Ask your financial advisors and CPA to set up Roth IRA for your teenagers and young adults who may have some income of their own.
Below are some names which can be attractive to buy and hold for the next 3-5 years in your portfolio.
CRM: Salesforce, Inc. provides customer relationship management technology that brings companies and customers together worldwide. Its Customer 360 platform empowers its customers to work together to deliver connected experiences for their customers. One of the largest software companies with exceptional leadership can be the least affected during a recession. It may not see the rapid upside due to its enormous size but it can help you protect your money during choppy weather.
DQ: Shares of several solar-related companies, including Daqo New Energy Corp DQ is trading higher amid a report President Biden will issue a proclamation allowing the import of solar panels from several countries without tariffs for 24 months.
Biden is planning to invoke the "Defense Production Act" to resolve a trade dispute that will revive stalled solar projects and kickstart domestic manufacturing of solar panels. Daqo New Energy Corp DQ is a Chinese company but has a great balance sheet. First Solar( FSLR) is another beneficiary of this alternative energy push.
MMM: 3M Company, is a great American company with worldwide business. It has seen a recent decline or stagnation in price due to Chinese manufacturing and regulation. It pays a solid dividend and can be a great name in your portfolio for income play over a long period of time.
BA: Boeing Company, is one of the two major commercial jetliner producers, Boeing is a vital name for defense and commercial travel. With recent bad press due to the 2020 crashes, Boeing has undergone great scrutiny and a decline in its stock price. Slowly but surely the company is getting new orders for better planes and the recent stock price trend is reflecting its regaining the public trust and market share from Airbus.
OKTA: Okta Inc, sells solutions for identity and access management. Its workforce offerings contain products to protect and enable employees, contractors, and partners, while customer identity and access products securely enable an organization's customers to use applications. Okta's software solutions are cloud-delivered, and its integrated network gives customers security protection and access across various applications critical to business and government needs.
DXCM: DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. With the recent decline in price, it becomes an attractive name to include in your portfolio.
High Risk / High Reward
Risky stocks can give you a big boost but they can also bring lots of pain and losses. My rule is not to have more than 10% of your money in high-risk stocks. Remember, the first rule of investment is not to lose money, capital preservation is the key to your success.
Palantir
OLO
AEIS
SIGA
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