The Best Stocks to Buy Now
Stock market investing can be a complex, time-consuming, frustrating process. Stock market investing can also be simple, quick, and exhilarating process. It can provide great financial losses, and it can provide great financial rewards.
Stock market investing can be a source of great stress, sleepless nights, and worry. It can also be provide peace of mind, fulfillment, and happiness.
Best Ways to Pick Stocks
The two primary ways of picking stocks are: fundamental analysis, and technical analysis.
Fundamental Analysis. The fundamentals of a given stock or company are it’s financials. What are it’s business prospects? What are the chances for the business to grow? Is the sector it’s in improving, or in decline?
Is it a leader in it’s sector and market? Or does it lag behind it’s competitors? What is the condition of the overall economy? It is a defensive stock? Or is it a high risk, high reward play?
Fundamentals look at historic stock prices, price to earnings ratios, revenues, profits, cash holdings, research and development expenses, insider/management holdings, and many other factors to determine if it is a stock worth buying.
Technical Analysis Technical Analysis is the study of charts of companies/stocks. The most commonly used charts are price charts. These charts document a stock’s price movements over different periods of time.
In conjunction with these stock prices are many other gauges of a stock’s performance such as volatility, convergence/divergence, number of stocks bought, number of stocks sold, stock averages, momentum, and many other indicators used to predict whether a given stock’s price is likely to go up or down.
World’s Best Stock Investor
Even if you’ve been living under a rock for the last 30 years, it is very likley that you have heard the name Warren Buffet. Known as the Oracle of Omaha, Warren Buffet is considered one of the very best, if not the best stock investor of all time. So, what is Mr. Buffet’s stock picking philosophy?
He says that he picks stocks based on being able to understand, and know the business that the company is in. He must also like the business that the company is in. It must have good fundamentals. He says that he will only sell if the fundamentals that he used when he picked the stock have changed for the worse.
He sets out to hold the stock forever, he says. He also adds to his positions quite often, and accumulates large enough stock holdings to be on the board of directors of many of these companies that he invests in. This philosophy has served him well, as his net worth is now in the $87 billion dollar range. Yes, that’s billion with a B.
How to Play the Market
There are many different ways to play or invest in the stock market. Some of these ways are stock options, mutual funds, shorting the market, penny stocks, value stocks, foreign markets, stock index plays, futures, and others. There are long term plays, and short term plays.
Long term plays are stocks that you buy and hold. Because with this play you have a long term time horizon, you don’t worry about it’s short term stock price fluctuations. Normally, unless something drastic has happened to the company’s business, the stock is not sold.
Short term plays are investments where the investor is looking to make a short term profit. His time horizon can be from a few minutes to a few months. Often these investors are willing to take a small profit, as long as their money is not tied up for extended periods.
The Best Stocks to Buy Now
So, what are the best stocks to buy now? Should I be a value investor, a momentum investor? Should I try buying penny stocks? Should I buy the big name stocks like Apple, Coca-Cola, Proctor & Gamble? Does it matter which stock broker I use? Should I use an online broker, or should I deal with the old fashioned person to person approach?
There is much to consider in order to maximize your opportunities in the stock market. In my humble opinion, there is only one type of stock to invest in.
DRIP Stocks What are DRIP stocks? DRIP stands for dividend reinvestment plan, or dividend reinvestment program. These are stocks of which the company that offers them allow for a direct purchase of stock in the company, and for the dividend that they offer to be reinvested in more stock.
This is a powerful investment instrument because it ulitilizes the principle of compound interest. Albert Einstein once said about compound interest, “Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t pays it.”
DRIPs also allow you to reinvest part, all, or none of the dividend. It makes sense to reinvest as much of the dividend as possible, at least until you need to take some of the dividend income to live, as in retirement. The best stocks to buy now are No Fee DRIPs.
No Fee DRIPs
The best type of DRIP stock to buy is the No Fee DRIP stock. This means that certain companies allow you to buy their stock without any brokerage or transaction fees, both for the initial purchase, and for the subsequent dividend reinvestment.
This means that you will be able to maximize your return, as you are not losing some of your investment in costly fees.
This can add up to a significant amount, especially with the powerful compound interest component. In order to speed up the process, additional, optional shares can be purchased, also for no fees.
There may be fees if you set up an automatic purchase through your bank account, and when selling shares.
DRIPs are considered more of a long term play, than a short term one. Generally speaking, the longer you can hold a DRIP the better as you will continue to automatically buy more shares of stock with the reinvestment of the dividend.
Although if enough money is invested, and reinvested, and the dividend is high enough, a considerable amount of shares can be accumulated within a relatively short time.
The only time I would ever consider selling a DRIP stock is if the company has dramatically decreased, or eliminated it’s dividend. This is not a common occurence, but it does happen from time to time. I would then find another DRIP stock to invest in with the proceeds of the sale.
Sleep or Excitement
Some stock investors love the excitement of investing the stock market. I have seen many stock investors that seem to live for the excitement of the price swings in the market. One day they are up because their stocks are up in price, and the next day they are down in the dumps because their stocks are off.
There are also stock investors that are so heavily invested in the markets that their very existence, and that of their family depends on the performance of their stocks. Personally, I can’t see living this way.
It is difficult to consistently pick stocks well enough to ensure oneself a solid return. This is especially so, if someone is always buying, and selling. With the combination of high fees, and volatile stock prices, it is not an easy proposition to beat the market.
If I am always worried about whether or not my stocks perform to my needed expectations, my stress levels would be a lot higher. This could easily carry over to other areas of my life as well, such as relationships, health, and job performance.
Personally, I like to sleep at night. That’s why I like the peace of mind that DRIP stocks give me. I primarily invest only in DRIP stocks, and within DRIP stocks, I invest primarily in No Fee DRIPS.
No Fee DRIPs are the best stocks to buy now , they will be the best stocks to buy tomorrow, and for the foreseeable future. Which No Fee DRIPs will you invest in?