Saturday, May 16, 2020

To Invest or Not to Invest

Yesterday, I was itching to buy.  However, for the most part, I am waiting for the next drop.

My tendency is to invest in the beaten down stocks.   I've been doing that with oil stocks, which hasn't worked out that well so far since I started buying too early.  However, I'm thinking there may be opportunities in airlines, cruise lines, and retail.   I'm even thinking about some banks.   The commonality of all these stocks if that they  have been beaten down significantly (50+%) due to COVID-19 shutdowns, although some have bounced back.   If the market does fall, these stocks probably won't fall much beyond their previous lows.  So I may buy a small position in these stocks and wait for the decline.   Stocks I am considering include:  DAL, SAVE, KEY, HBAN, NCLH.  I already have relatively large positions in various energy (e.g. XOM, SLB, OXY) and some small positions in REITs (e.g. WPC, NNN, VTR, STAG, O, and GLPI).  I may also add to some of these when the next significant market decline occurs.

The other option is to invest in stocks that have hit new highs since the market crash in March 2020.  When these stocks fall to or below their March 2020 lows, I will start buying.   If they fall more than 50% from their new high, I will buy more.  Here are some companies I am considering:  DOCU, IRTC, VTRX, TDOC, COUP, TWLO, EVBG, BAND, VEEV and TEAM.

Right now, I am still going to wait for the next big drop in the market before purchasing large positions.  Until then, I may make a small purchase to start a position.  In addition, I will still be selling if the market continues to rally.

Full disclosure:   At the time of posting, we currently own shares of KEY, HBAN, XOM, SLB, OXY, WPC NNN, VTR, STAG, O, GLPI, BAND, VEEV and TEAM.

For more on Reflections and Musings, check back  Fridays  for a new segment.

This is not financial nor investment  advice. Please consult a professional advisor.

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