2009 is the Year of the Ox according to the Chinese Astrology, but for the stock market participants, 2009 will be the Year of the Stock Trader. You are going to see some volatile days with very big news revolving around long term oil prices, viability of the United States stimulus package, increasing unemployment, California running out of money, and whether the housing market will ever bottom out.
My strategy this year will be taking positions in companies that are being oversold and doing it incrementally instead of “going all in” like they say in poker. If you normally invest in $3000 chunks, break that into $1500 chunks and reserve a bit of money in case that stock you love falls another 10% so you can cost average and spread around your funds to different sectors. 2008 showed us that no sector is immune to the slaughter in stock prices although some stocks only fell 40% compared to 80% from yearly highs.
With oil hitting $150/barrel and even though it’s sitting at barely 25% of that value, I am a big fan of energy and commodity stocks. Knowing how important natural gas, coal, solar, and petroleum will be through every developing nation, it’s a golden opportunity to take a position while these prices are so depressed. Banks and housing stocks will have many more tough times ahead of them and a lot of infrastructure stocks will follow the health of the economy. Most of the ten investments below are ones that I believe will have a better chance to go up than down in the next few months. If they do go down any further, just add more shares!
- Alcoa (AA)
- Procter & Gamble (PG)
- Wal Mart (WMT)
- Garmin (GRMN)
- Diamond Offshore Drilling (DO)
- Transocean (RIG)
- Devon Energy Corporation (DVN)
- Nabors Industries (NBR)
- General Electric (GE)
- Perdigao (PDA)
Most of these are large companies with none being small cap stocks. 6 of the 10 corporations have some kind of ties to the energy industry and all are well off their yearly highs. I threw in some Dow Industrial stocks too for some dividend plays that shouldn’t take too big of a hit if the market tanks any further. Take your 30% gains when they come and be a happy investor!!!
Disclosure: I have current ownership in Transocean.