Best Stocks to buy

We have witnessed mortgage meltdown and market crash and again seen the market rise so if I have to answer this question then the best stocks to buy are blue chip stocks. The companies that I am going to name are just an indication and I truly believe that everyone has its own set of reason fro evaluation the best stocks to buy.

I am a small investor with no great research at my disposal and I want to hold these stocks so that I do not have to worry about the stock market ups and downs much. At least this is this criteria that apply.

So here is the list of stocks that I think are worth buying

Warren Buffet’s Berkshire Hathaway (BRK.B) – Nothing in my view can beat this company. Warren Buffet has this uncanny ability to pick up businesses and he ahs proved to as smart as he was when he was young. So Pick this stock and enjoy the rewards. I have even referred to him in my earlier post about best stock investments advice.

Wal-Mart stores (WMT)– This is true that this stock can have its ups and downs as the recession happens or recedes but in general the earnings are fairly stable and they are the best when it comes to cutting costs and surviving the recession.

Intel(INTC) – A very strong company and totally dominates the chip market and beats the other competitors hands down and has shown resilience every time it has faced pressure from economy as well as competitors.

Best Buy (BBY) – This stock has benefited from the closure of the CircuitCity and has been aggressively pursuing growth and has even opened stores where the competitiors are closing the stores.

Another good stock is Exxon Mobil (XOM)

Here are some of my tips for the investment as a small investor

Hold for long term

Buy shares that you can hold for long term and that will companies that majorly blue-chip companies. Never go for the small or the medium cap companies as they generally do not have the ability to survive the recession as it happened in 2008. Read my post here on learn to invest stocks . When I say blue chip I am talking about the companies who have large market capitalization. Large caps or blue chips are those which have a market capitalization above 10 billion dollars.

Profitability ratios

As investor I am sure most of us cannot do much research but in general you can have access to the data out there on the websites of the exchange as well as the website of the companies. Check how much profitable the companies by checking what is their return on Equity or return on assets or the return on the Capital employed.Each of these will help you evaluate a company.

Past Indicators are not indicators of future performance

This is true but the fact is that this has helped to evaluate the companies and it has shown that stocks over the average of five to ten years period will give returns much better than all other times and that is it is better to use good blue chip stocks as a money saving instrument. If you are looking at the time frame when to buy stocks then this is the good time.

Special situations

Always benefit from the special situations that the companies are in. For example the Banks like Bank of America, Goldman Sachs and Well Fargo. Use this time to pick a few shares with good track records but cheap valuations.

Look At emerging Markets

China. Brazil, India and Russia the so called BRIC economies have companies that are in the same space as the giant here and these companies are growing at faster pace than the other companies. So look at the Chinese companies and invest in those. For all this to work for you need to know the basics about stock picking and one of the basic things is the Fundamental analysis of stocks.

Divined investing

Now if you are only looking at the stocks that only need to be invested with a view to getting dividend then check the companies with a high dividend paying record. Please be aware that in these times of recession a lot of companies have stopped paying dividend to conserve cash.

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