For new investors, the stock market can be scary. It can be challenging to know which stocks to invest in, which to drop, and when to do all of it. In the last issue, Mr. Sherman, the Investments teacher, recommended five of the best stocks to invest in. In this issue, we consulted Max Brzozowski, Eastern senior and president of the Investments team.
Max has well-researched opinions, but these stock suggestions are for informational purposes only. Each investor should always do his or her own research and analysis before making any decisions.
That being said, here is Brzozowski’s list of five recommended stocks.
First up is AT&T, a global provider of telecommunications, media, and technology services. Along with names like Verizon and Sprint, AT&T is one of the largest providers for wireless and wireline telecom, video services, and other broadcasting capabilities.
“Over the past three months,” Max explains, “it has experienced a gradual decline in its Small Moving Average with a -$1.50 ~5%. In the last few days, the stock has been highly volatile due to issues independent of the company (COVID and the Omicron variant.
The downward trajectory of the SMA and the recent strength of earnings presents a unique entry point to buy into the stock.” This is a slow-moving stock, but Brzozowski recommends readers take advantage of the opportunity to buy in.
For new readers, an ETF, or “Exchange Trade Fund, is a combination of stocks, securities, bonds, etc., and is traded as a whole.
The SPDR Dow Jones Index ETF is a diverse grouping of stocks including UnitedHealth Group (UNH), Goldman Sachs (GS), Home Depot (HD), Microsoft (MSFT), Salesforce (CRM), MacDonald’s (MCD), Honeywell International (HON), VISA (V), Boeing (BA), and Amgen (AMGN).
While Max predicts extremely slow growth, he still recommends an investment. “This fund has followed the Dow Jones Industrial Average in its recent activity including the panicked sell-off due to the Omicron variant of COVID-19 and the subsequent recovery. Given the largely inflated nature of the public markets, finding the entry point into this ETF is key. It is suggested that the recent and ensuing dips be viewed as purchasing opportunities.”
Moving into a different area, Deere Co. is a multi-faceted company with focuses in agriculture and turf, construction and forestry, and financial services. They operate in the manufacturing, sale, lease, and distribution of agricultural and turf equipment and related service parts.
The company has moderate growth and could be held onto for either short-term trading or long-term returns. “The activity of this stock is most closely tied to the infrastructure packages that are being pushed by the Biden Administration. In these packages are two types of infrastructure: physical and social. In the event of positive news about the passing of physical infrastructure, this stock will experience positive price changes. This prediction can be made from its vital role in the construction projects that will require its equipment and services.”
Moving into the realm of cryptocurrency, Proshares Bitcoin ETF is a fund seeking to find “capital appreciation primarily through managed exposure to bitcoin futures contracts.”
In other words, this fund does not invest directly in Bitcoin but instead in assets that have corresponding value to Bitcoin and similar cryptocurrencies. “Recently, this fund has experienced choppy water with COVID scares,” Brzozowski warns. “However, this fund-and cryptocurrency, in general, is a good hedge play to the macro-market because of the negative shift in demand for the US Dollar.
It is recommended that this fund be purchased in the short term and reactively to positive news about bitcoin itself or in response to negative news about the US Dollar and major indexes.” Of all of his suggestions, Brzozowski describes this to be the most high-risk investment, but it offers the potential of a high reward as a short-term hold.
The final investment on his list is Buckle Inc., a retailer of casual apparel, footwear, and accessories for young men and women. They operate in 42 states throughout the US and have over four hundred forty brick and mortar locations.
“The principal draw to this asset is its rising dividend yield. All well-balanced portfolios have some equity in the dividend sector. However, it is advisable to place personal equity into this company because of the special dividend ordered by the board of directors to be paid out December 29 to shareholders of December 20 or earlier.
In addition to providing a 6% increase in dividend yield, changes to the yield such as this one will create demand and volatility in price that can provide short term profit as well.” The low-risk investment is promising for a long-term reward.
With each of these suggestions is a recommendation towards personal research, as no investment should be made without consideration to one’s own personal profile. Smart investing can be a helpful secondary source of income, but each investment should be carefully evaluated.