Best Stocks to Invest In

Reasons to Invest Now

A bearish market is always an excellent opportunity for investors to buy assets because prices are on the decline and can be bought significantly cheaper. Here are three main reasons why you should invest in stocks now.

Anticipated Recovery

When investors move to reduce their exposure to risk amidst what's known as 'risk off' sentiment, the stock market crashes. Investors fear putting money into risky assets like stocks while the global economic situation is unstable. Nevertheless, we may see the situation soon normalise. Many countries such as Spain, Italy and the United States have almost passed the peak of their respective crises.

As soon as the market begins to recover, stock prices will go back up. Many analysts claim the stock market has reached its bottom, meaning it's a great time to buy shares at their lows.

Quantitative Easing

On the one hand, investors are scared by companies filing for bankruptcy protection and world central banks embracing quantitative easing monetary policies and offering huge loans. Why? Because these signal a global economic recession.

On the other hand, such measures are supposed to help economies all around the globe to recover as soon as the pandemic disappears. That means markets are already receiving support, which reduces economic risk.

Low Interest Rates

With world central banks cutting interest rates, stocks have an excellent chance to reduce the discount rate on future profits. At the same time, low interest rates allow investors to borrow more and inject cash into the economy through various avenues such as the stock market.

A bearish market provides an excellent opportunity to buy assets much cheaper.

The Best European Market Stocks to Buy

Let's consider stocks that are supposed to bring potential profits despite warnings of a forthcoming global economic recession. We'll start with European stocks that may become a good investment despite the current market crashes.

large display: daily stock market price

Volkswagen AG

Volkswagen has been going through hard times these past few months, not just because of the current pandemic but due to its own false reporting on the pollution its cars produce. According to the company's earnings report, its shipments fell by 37.9% in March and by 23% in Q1 2020.

Nevertheless, the company is planning to resume production soon thanks to, among other things, China's large enterprises fully returning to production. In addition to that, the company's stock plunged to lows in September 2010, which provided a great buying opportunity.

Airbus SE

Airbus is among the aerospace companies announcing defaults and making thousands of employees redundant. Countries' moves to impose coronavirus-related lockdowns and close their borders are affecting the aerospace company's income. Although the corporation has been having a rough go of things lately, it will have a chance to recover as soon as borders open back up.

If we compare Airbus and its American rival, Boeing, we could say that Airbus has more chances of recovering than its US competitor because the European company has public trust. Boeing's stock has plunged lately both because of the COVID-19 crisis and two crashes involving its aircraft.

Daimler AG

Just like Volkswagen, Daimler AG has had a hard time as manufacturers around the world are closing. In early April, Fitch Ratings downgraded the company's credit rating while the company tapped the debt market in search of an over $11 billion credit line.

Nevertheless, Daimler AG has even higher chances of recovering after the situation stabilises than Volkswagen does. As of April 2020, part of the manufacturing sector has started to reopen around the globe, allowing it to start producing again.

Top US Market Stocks

The US took first place in the number of virus cases. The economy has been suffering a huge contraction leading the whole world into an economic recession. What companies will be able to recover during the year?

The economy has been suffering a huge contraction leading the whole world to an economic recession. Nevertheless, there are exciting opportunities in the stock market.

The Walt Disney Co

Walt Disney was dramatically hit by the pandemic. The company had to close theme parks and cruise ships. Cinemas are empty, and even the sports channel ESPN is showing e-sports and reruns of recent cornhole cup games. Disney has already made thousands of workers redundant. According to the data, the company is losing around $30M per day. However, this is a chance for investors to buy the company's stock at the bottom.

Why are we sure the company will recover? It's one of the oldest companies in the world. Moreover, it has already placed a secured debt of $7 billion that will allow it to stay afloat in challenging times. Credit rating agency Moody's claimed the company had over $12 billion of unused credit that can be utilised if the impact of the crisis worsens. The stock will recover as soon as market sentiment eases.

The Coca-Cola Co

Coca-Cola has been under pressure recently, considering the shutdown of supermarkets and border closures. Nevertheless, the company will definitely recover when the virus disappears. The same as Walt Disney, the Coca-Cola Corporation is a blue-chip company that can operate in any market circumstances.

In March, the company managed to raise $5 billion in the bond market. However, analysts believe it won't need all of these reserves to recover. Moreover, the state of the Coca-Cola Corporation is not as bad as that of Walt Disney. Although consumer spending has declined and many shops are closed, people will always purchase beverages, especially when they spend time at home during a global shutdown.

Furthermore, the company is famous for its obligated dividend payments. In all the years of its existence, the company has never missed dividend payments despite many market recessions.

Amazon

Previously, we talked about companies suffering due to the current crisis. But Amazon is a company that is using the situation in its favour. Contrary to the companies suffering due to the global shop shutdown, Amazon has increased its profits by offering online services through which people can order food and other essential items.

At the same time, it's a great advertisement for the company. If a person has never visited Amazon's website before, they'll see low prices, fast delivery and a wide range of supplements firsthand. As such, the company's value is anticipated to rise even after the crisis.

The Best Asia Market Stocks

As a leading economy in Asia, China was the first country to feel the economic effects of the crisis. Although the region suffered the longest shutdown in the world, some companies managed to adapt to the circumstances.

The region suffered the longest shutdown in the world, but companies have the power to recover soon.

Alibaba Group Holding Ltd

Similar to Amazon in the United States, Alibaba is surviving the crisis through online sales. Although retail sales in China plunged by 20% between January and February, online sales fell by 3%. At the same time, the demand for the enterprise's cloud sphere has increased, as many companies have had to move to online sales.

The company's position is already quite stable. As soon as the situation subsides, the company's stock will see a robust increase.

Toyota Motor Corp

As with other huge manufacturers, Japanese giant Toyota has been suffering from the manufacturer shutdown. Although its stock reached the bottom in mid-March and rebounded, investors still have a chance to buy shares at low prices. Moreover, the continuation of the quarantine and production difficulties may pull the stock prices even lower.

Nevertheless, the company won't pull off the road; it will continue operating in the market. Toyota Corporation has gone through plenty of crises, all of which have confirmed its ability to survive the 2020 crisis.

China Mobile Ltd

China Mobile's stock is a security worth buying now because the company is stable despite the economic recession. The mobile industry wasn't affected too much by 2020's events. The worst moment happened in mid-February when the company's stock price started moving up, signalling the company's strength.

The only thing that may pull the stocks down is the threat of banning China Telecom in the US due to national security risks.

Top New Stocks with Potential

Although the current situation is complicated, companies plan to tap the public market. What about the companies that announced an IPO and are ready to tap the market?

Airbnb

The current situation postponed the company's plans to go public. However, it'll be an attractive buy as soon as it releases its stock. First, its chief financial officer came from Amazon, which confirms the company's willingness to expand.

In 2019, the company acquired the HotelTonight booking website and Gaest.com rental platform. The company's popularity continues to grow day after day. Although it has been going through challenging times as people have stopped travelling, the market recovery will add value to the company.

Albertsons

This company's value is estimated to be at $19 billion. It's the second-largest supermarket operator in the US. The company includes both the Safeway and Jewel-Osco grocery chains. On 6 March, Albertsons applied for S-1 registration with the SEC as part of its plans to hold a $100-million public offer on the New York Stock Exchange.

ZoomInfo

Don't confuse this company with Zoom, which offers video calls and online chat services. ZoomInfo is a software that provides market intelligence about business people and companies for sales, marketing and recruitment. The company was planning to go public in 2020, but the events at the beginning of the year didn't allow it to implement the plan.

Stock Investment: Types

Knowing what companies you should invest in is only part of the story. The first thing you should choose is the type of investment to make.

Buying Shares with Dividends

There are two primary ways to invest in stock with dividends: ETFs and individual stocks. You can buy actual shares in stocks via an online broker or traditional stockbroker and a financial adviser/investment manager.

ETFs and individual stocks are the primary ways to invest in shares with dividends.

An ETF is a pool of stocks with dividends that may include up to hundreds of different stocks. It helps to diversify your risks, so even if the dividends of one or several stocks move down, it won't affect the average.

Investing in individual stocks is more complicated because you have to pick the right company by evaluating many factors.

Advantages	Disadvantages
Long-term investment. Although investing in actual stocks is complicated, many investors choose this method because it provides a long-term income.	Big funds. Although it seems you don't need to have a big budget to buy actual stocks, since one share may cost $10, investors in actual stocks will never buy just one. To get good results, you need to buy much more, which involves high risk and readiness to lose your capital.
Lower risks. If you choose a company wisely, you can forget about any market vulnerability. The investment is considered a long-term action that isn't affected by minor factors.	Small profit. Purchasing real stocks is associated with lower risks because the investment isn't strongly affected by market volatility. As a result, investors end up with a smaller profit.
	More analysis. When deciding to buy a company's stock, you need to analyse many factors, such as dividend yields, the stock's payout ratio, etc. At the same time, you should know how risky the asset is when diversifying your portfolio.
	Taxes. You may not have to pay fees for trading CFDs, but you will for holding stocks.
	Stressful. You don't have enough time to analyse the market and make a decision. There's no opportunity to place a small order. At the same time, you have competitors. Investing in real stocks is a nerve-racking activity. It puts pressure on you while you try to grab shares at the perfect price.

Although you can invest in stocks via brokers, it's better to have an advisor, especially if you're a newbie. An advisor will represent your interests, help with procedures and advise you on purchasing better stocks.

CFDs

CFD means a contract for difference. It's a common term for different financial markets. When trading CFDs, you don't buy or sell an actual asset, such as a barrel of oil, bullion or a company's stock. You simply speculate on whether prices will rise or fall.

CFDs are the easiest way to invest in the stock market.

This type of investment has advantages and disadvantages. Usually, traders prefer short- and middle-term trades that can yield maximum results in as little as a month.

Advantages	Disadvantages
Small budget. The first and most significant advantage for any trader is the small budget you need to start operating with stock CFDs. Additionally, CFDs are traded on margin. So, a broker can offer you leverage that will increase the possibility of raising your funds.	No ownership. No, you won't become a shareholder of Apple or Amazon.
No stress. When trading CFDs, you have time to analyse the market, apply various technical indicators and check fundamental factors. Moreover, you can set as many trades as you like (based on your deposit). You also spend less time in front of the computer monitor by placing stop-loss and take-profit orders.	Higher risks. When trading CFDs, most traders choose small timeframes that are famous for their huge volatility. Stock CFD trading is similar to trading in the forex market. In other words, you trade on frequent market movements with a chance to earn more. However, the market is vulnerable and influenced by unpredictable events.
Win-win strategy. It doesn't matter if the price goes up or down; you can make potential profits either way. This is the opposite of the situation when you hold real company shares, and all you can do is hope the price will rise.

Indices

The third option for investing in stocks is indices. An index represents several stocks that are traded as one unit and serve a specific market or part of it. Famous examples are the:

S&P 500, which represents stocks from the 500 largest US companies
Nasdaq Composite Index, which consists of stocks from more than 3,300 companies listed on the Nasdaq Stock Exchange
STOXX 600 includes the stocks of 600 large-, medium- and small-capitalisation companies in 17 European countries.

Index trading is similar to CFD trading, which involves speculating on price differences.

Let's take a look at the pros and cons.

Advantages	Disadvantages
Diversification. Index trading is a great chance to diversify your portfolio since any index consists of plenty of stocks. As a result, a decline in one stock price will be balanced by the rise of another.	One industry. Usually, indices are composed of single-sector stocks. This means that if there are problems in the industry, the whole index will go down with its constituent stocks.
Stability. Indices reflect the sentiment of the entire industry. Fewer factors affect their direction. They're less risky and more stable.	Not real shares. As we stated above, indices are traded like CFDs. So, you catch the market sentiment and trade in the market direction without purchasing real shares.
No crossroads. By trading indices, you don't have to pick up stocks by analysing plenty of factors.	Too many indices. On the one hand, index trading lets you hedge your risks. But on the other hand, some stocks have a more significant part in the index than others. That means that if it moves significantly in any direction, the whole index will be affected. That's why you need to know what stocks are included in the index.

How to Invest in Shares Effectively

You may know which stocks will skyrocket in 2020, but if you don't know how to invest effectively, you won't ever succeed. Here are the most useful tips for investing in the stock market.

chess king and queen in the fairy palace

Analysis, risk management and practice are your keys to successful investment.

Fundamental and Technical Analysis

Before you decide to invest in any asset, you should analyse the current market situation. There are two main types of analysis: fundamental and technical.

Fundamental analysis evaluates the intrinsic value of an asset according to macroeconomic and microeconomic factors. It helps understand whether a stock is undervalued or overvalued. When we speak of fundamental analysis, we mean a company's management, business model, competitive advantage, industry, balance sheet and income statement.

To predict a stock's direction, you should evaluate the situation in the industry the company belongs to using sector analysis. After that, you should check whether the company has faced difficulties such as mergers and acquisitions, dismissals and illnesses among top management, etc. All of these signal that the company's stock will lose its value shortly.

Technical analysis looks at previous market movements and builds forecasts on them. To apply technical analysis, you need to learn technical indicators and chart patterns that determine the price direction. The best technical indicators for the stock market are Volume, the Awesome Oscillator and Fibonacci retracement.

Risk Management

Traders and investors usually undervalue risk management. No predictions will work well if you don't know how much money you should invest.

Hedging. The first rule of risk management is to split your funds. Some traders can be too confident in their analysis and put all of their money into one stock and wait until it brings profit. As a result, they just don't have spare cash to invest in a better option. Choose several stocks in different sectors to invest in, keeping some funds in advance. The varied industries will prevent you from taking big losses if one of them performs poorly.
Stop-Loss and Take-Profit Orders. It doesn't matter what market you trade in, these two terms are the key to balanced risks. A stop-loss order will limit your losses if your forecast is wrong and the market moves in the opposite direction. Take-profit orders are used to grab profit before the market reverses. Also, you won't need to stay in front of the computer screen to wait until the desired level is reached.
Return Calculation. Take-profit and stop-loss levels can also be used to calculate expected returns and know how much money to invest. It can also be used to choose a more profitable asset to invest in.
Position sizing. Position sizing determines how many units you should trade to reach the desired level of risk. Risk no more than 1-2% of your deposit on any single trade.

Practice

You won't be able to make a significant profit until you gain enough practice. Theory helps, but practice is key. Before you apply your valuable knowledge in the real market, test your skills safely in a demo account that fully simulates real-market conditions and allows you to take the market's pulse while avoiding risks. You can use all the technical tools you need to predict the market direction.

Conclusion

To sum up, there are many ways and options to invest in the stock market. The easiest one is CFDs, and the most complicated one is individual stocks. The market situation frequently changes, so be ready for stocks to change their direction and to adapt to the situation. To be fully equipped, start trading stocks in a Libertex demo account to improve your skills for better results when you're ready to trade for real.

Top Stocks to Invest In