Best Stocks To Buy Now In December 2023 (this week!)
Technology stocks and growth stocks have performed particularly well in 2023. The Nasdaq 100 has soared more than 45% year to date, while the iShares S&P 500 Growth ETF (IVW) is up more than 20%.
On November 1, the Federal Reserve opted to maintain its target for the federal funds rate within a range of between 5.25% and 5.5%, but concerns over rising energy prices and stubborn overall inflation have dampened investor appetite for risk assets, weighing on stock prices.
Investors now believe there’s a good chance the Fed can navigate a soft landing for the U.S. economy. However, the New York Fed’s recession probability model estimates there’s still a 46% chance of a U.S. recession within the next 12 months. With uncertainty surrounding government funding and the war in the Middle East, there are plenty of political risks looming.
In a volatile and unpredictable market, Bank of America recently compiled a list of its best stocks to buy now, which we profile below.
Company (Ticker) | Forward P/E Ratio |
---|
Boeing (BA) | 61.5 |
CSX (CSX) | 16.6 |
Five Below (FIVE) | 29.5 |
Kraft Heinz (KHC) | 12.0 |
Occidental Petroleum (OXY) | 11.4 |
Owens-Corning (OC) | 10.5 |
RenaissanceRe (RNR) | 6.3 |
Sarepta Therapeutics (SRPT) | 41.8 |
Teva Pharmaceuticals (TEVA) | 4.1 |
What To Look For When Buying Stocks
When buying stocks, it’s essential to do your research and consider the factors that can impact the performance of every company. Here’s what you need to watch out for:
- Fundamentals. Start by researching the company’s financial statements, such as their revenue, earnings, profit margins and debt-to-equity ratio. Figures like these help you determine the company’s overall financial health and whether its stock is a worthwhile investment.
- Industry trends. Understand trends in the company’s industry. Research reports, news and analyst predictions like the ones outlined above to get a better sense of where the industry is heading.
- Management. The experience and track record of a company’s management team can significantly impact its success. Look at their history of decision-making, leadership and overall strategy.
- Competitive advantage. Look for companies with a competitive advantage over their peers, such as strong brand recognition or unique intellectual property. This can give them an edge in the market and help the stock sustain appreciation and dividend payouts over time.
- Valuation. Assess whether the stock is overvalued or undervalued compared to similar companies in the industry. You can use metrics like price-to-earnings ratio, price-to-sales ratio and the price-to-book ratio to help determine the stock’s valuation.
- Dividend yield. Always look for stocks that offer a decent dividend yield, since over time dividend payments can make up for a significant part of your return on investment.
- Risks. Every investment comes with risks, and you need to assess the risks associated with the stock you might be purchasing. Look at factors like the company’s debt level, overall industry volatility and geopolitical risks that could impact the company’s performance.
Different Ways To Invest In Stocks
There are many different ways to invest in stocks. Some of the most common include:
- Investing directly in individual stocks on the stock market
- Indirectly investing via traditional mutual funds and ETFs
- Indirectly investing via closed-end funds
- Investing indirectly through investment pools known as collective investment funds, which are often run by banks and trust companies and are primarily part of a workplace retirement plan or stock bonus plan
- Investing indirectly through so-called derivatives, which are financial contracts—such as futures contracts—with values based on underlying assets
Heading into the second quarter of 2024, investors are optimistic that the market and the economy can maintain its positive momentum. However, the New York Fed's recession probability model still estimates there's a 58.3% chance of a U.S. recession within the next 12 months. In this volatile and unp
www.forbes.com