What stocks should I buy for the rest of 2014? At this time I have about $88,000 available in my account and although the market is near its highs, I would still like to find another stock or two to add to my portfolio.
I’d like to find a stock that will not get hit too hard if the market starts to sell off. That rules out the overpriced high flyers like Facebook, Amazon, Netflix and any others that have ridiculous valuations. Preferably I’d like to find a stock of a company that is undervalued and has great long term prospects, a business that will grow and become more valuable as time goes on. With the high valuations so many stocks have today, that might be difficult.
Which Stocks To Buy Is Always The Hardest Question
For me, by far the hardest part of investing is picking which stocks to buy. There are so many to choose from and whatever I do, there is often a lot of second guessing afterword.
It doesn’t help that I seem to remember my failures more than my successes. For instance, I am still kicking myself that I didn’t buy Under Armour (UA) a couple months ago when it was under $50. I just couldn’t get myself to pull the trigger and now it looks like its too late (stock price is now $69). Similarly, I was looking at Baidu (BIDU) a year ago when it was under $100 and never bought any. Now the stock sits at $224. OUCH! What a lost opportunity.
In order to prevent situations like I just described from happening, sometimes you just have to decide you are going to buy a stock and be done with it. You might be right or you might be wrong but all the second guessing and indecision will lead to is inactivity and then you end up with nothing being accomplished. You can always find reasons for and against buying a stock if you look hard enough so you just have to choose the stocks you feel best about and go with them.
Conservative or Aggressive Stock Picks?
I hate losing money (who doesn’t) so I tend to be conservative in my stock picks and try to stay away from unnecessary risk. I think I should take more small shots (lower dollar amounts) at some stocks that have higher growth potential along with higher risk.
Perhaps allotting a certain percentage of my portfolio to slightly riskier stocks that could be big winners is a strategy I should adopt. Had I done that I might at least own some shares of UA and BIDU instead of buying nothing.
I Think I Will Buy Alibaba At The IPO
At this time I plan on buying Alibaba (BABA) on the IPO date for much that reason: I’m not convinced BABA will be an extraordinary value but I think the company is solid and will provide a strong challenge to many US online stores including Amazon. I expect AMZN stock to continue to be under considerable pressure (their last earnings caused a big stock drop) and think investors who like Amazon will like Alibaba. I believe there will be a tremendous amount of interest in BABA when it comes public and it could be a good long term play.
I’m also thinking about buying Yahoo which has recently been in the news because they own 24% of Alibaba and are being allowed to keep a bigger share of the company than originally planned. Also there has been a lot of rumors in the last week that YHOO could be a good candidate to be bought out and that has driven the stock price up by about 10%.
Both BABA and YHOO would be stock picks that, from my perspective, incur more risk than I normally like to take.
***On a side note, I wish I had bought more Apple stock when I had the chance but I do own some more of it in another portfolio so I didn’t want to overload on one stock. If you are wondering whether you should buy Apple stock, I still think it is a good buy at any price under $100 for investors willing to be patient and hold. Apple is such a solid company that, especially when you factor in the 2% dividend, anyone with a long time horizon should own some of the stock.