Hey there! In this article, we’re going to explore three stocks that you should keep an eye on during the current stock market downturn. The speaker in the video highlights the importance of having a strong financial base before investing and emphasizes the potential value in stocks like Google, Apple, and Disney. Google is seen as a solid company with lots of cash and is currently trading at a discount. Apple has a strong historical performance and healthy cash reserves. As for Disney, the closure of theme parks and cancellation of sports events may impact its revenue. The speaker advises steering clear of Facebook due to government regulations and political uncertainties. They also suggest using dollar cost averaging to gradually invest in the selected stocks and take advantage of market dips. So, let’s dive in and see what these stocks have in store during this market turbulence!
Stocks to Watch During the Stock Market Downturn
During a stock market downturn, it is essential to carefully choose stocks that have the potential to recover and deliver strong returns in the long run. This article will discuss five stocks that are worth keeping an eye on: Google, Apple, Disney, Facebook, and the investment strategy of dollar cost averaging.
Overview
Google is a company that needs no introduction. As one of the largest technology firms in the world, Google dominates the search engine market and has a strong presence in various other sectors. With its vast amount of cash reserves and a history of consistent growth, Google is an attractive company for investors.
Financial Health
One of the key factors that make Google a compelling investment option is its solid financial health. The company generates substantial revenue through its advertising platform, which has proven to be highly profitable. With its strong cash position, Google has the ability to weather market downturns and continue investing in innovation and expansion.
Trading at a Discount
Currently, Google’s stock is trading at a discount compared to its previous levels. The market downturn has caused the stock price to decrease, presenting a buying opportunity for investors. By purchasing Google stock at a lower price, investors can potentially reap significant returns when the market recovers.
Apple
Overview
Apple has a long history of success and is known for its innovative products and loyal customer base. The company’s strong brand value and continued market dominance make it an appealing option for investors.
Historical Performance
Over the years, Apple has consistently delivered strong performance, both in terms of its stock price and financials. While past performance does not guarantee future results, Apple’s track record suggests that it has the potential to recover from market downturns and continue its upward trajectory.
Strong Cash Reserve
Similar to Google, Apple boasts a substantial cash reserve, which provides a buffer during economic uncertainties. The company’s ability to navigate challenging times and invest in research and development ensures it remains at the forefront of technological innovation.
Disney
Overview
Disney is a global entertainment giant, with a diverse portfolio that includes theme parks, media networks, and film production. Despite being severely impacted by the COVID-19 pandemic, Disney remains a stock worthy of consideration due to its strong long-term prospects.
Impact of COVID-19
The closure of Disney’s theme parks and cancellation of sports events has had a significant impact on its revenue. However, it is important to remember that these are temporary setbacks, and once the pandemic subsides, Disney is well-positioned to recover and regain its market share.
Theme Parks Closure and Sports Event Cancellation
While the closure of theme parks and cancellation of sports events have affected Disney’s short-term profitability, the company has made impressive strides with its streaming service, Disney+. With more people spending time at home, the demand for streaming content has increased, and Disney+ is expected to witness substantial growth.
Overview
As one of the largest social media platforms, Facebook has revolutionized the way we connect and communicate. However, the company faces challenges due to increased government regulations and political uncertainties.
Government Regulations and Political Uncertainties
Facebook has come under scrutiny for its handling of user data and alleged misuse of its platform for political purposes. This has led to increased government regulations and a more cautious approach from advertisers. These factors may affect Facebook’s profitability in the short term and make it a risky investment during a market downturn.
Dollar Cost Averaging
Definition
Dollar cost averaging is an investment strategy that involves purchasing a fixed dollar amount of an investment at regular intervals, regardless of market conditions. This approach helps investors mitigate the impact of short-term market volatility and averages out the cost of the investment over time.
Benefit during Market Downturn
Dollar cost averaging is particularly advantageous during a market downturn. By investing a fixed amount regularly, investors can take advantage of lower stock prices and potentially accumulate more shares. This reduces the impact of market fluctuations and allows investors to benefit when the market eventually recovers.
Gradual Investment Strategy
Dollar cost averaging also provides a systematic approach to investing, removing emotions and impulsiveness from the decision-making process. By sticking to a predetermined investment plan, investors can avoid making knee-jerk reactions based on short-term market movements.
Conclusion
When navigating a stock market downturn, it is crucial to approach investing with caution and a long-term perspective. Google and Apple’s solid financial health and strong track records make them attractive investment options, while Disney’s potential for recovery and growth in the streaming industry cannot be overlooked. However, it is important to carefully consider the implications of government regulations and political uncertainties on stocks like Facebook. Finally, implementing the investment strategy of dollar cost averaging can provide investors with a disciplined approach to investing during market downturns. Remember, investing always carries risks, and it is essential to conduct thorough research and seek professional advice before making any investment decisions.