Stock Market Crash 2020: 3 Top Stocks To Buy

Summary

  • Top stocks: United Airlines (and airline stocks in general), Carnival, and Booking
  • Higher risk investors can do their due diligence to see if the stocks are suitable investments for them
  • Carnival pays a dividend but it can cut the dividend if things get really bad

I made this video, and I hope it gives a broader perspective on the investment landscape on top of the usual dividend ideas I give.

In late January, in my video “Will the Stock Market Crash in 2020?”, I essentially said that any negative impact on the economy can “drag the market down to its normal valuation of about 17 times earnings or even lower.”

It’s actually happening.

Stock Market Crash 2020?!

The 2020 stock market crash came fast and furious! In about a week, the U.S. stock market has corrected 12%, while the Canadian stock market has fallen 9%.

Source: Ycharts with author annotation

Actually, I wouldn’t call this a stock market crash, yet. To me, a market crash is when the market falls 30-50%.

I know it’s scary to think that you can lose half of the value of your stock portfolio, but this has happened before and can happen again.

I’d visualize my stocks being cut in half periodically so that I won’t panic when it happens.

It’s a Normal Market Correction So Far

From time to time, it’s normal for stocks to correct 5-15% for whatever reason that may appear in news headlines.

Frankly, I welcome the decline as it was getting harder and harder to deploy money into the stock market. In case you haven’t noticed, the S&P 500, which is a proxy for the U.S. stock market, delivered total returns of 31.5% in 2019, which was more than 3 times its long-term average returns of 10%.

So, it’s only natural that the market is giving some of the gains back in a correction.

Read More

Dividend Yield Explained Simply: What’s a Good Dividend Yield?

If you’re new to dividend stock investing, you’d want to wrap your head around what a good dividend yield is. In this video, I’ll use real-world examples, including Johnson & Johnson (NYSE:JNJ), Apple (NASDAQ:AAPL), General Electric (NYSE:GE), and Simon Property Group (NYSE:SPG).

Overview

Graphic showing that dividend income can be used for vacations, retirement, and paying for bills and mortgage.

You’re probably interested in investing in dividend stocks if you’re here to learn about dividend yields and want to know what a good dividend yield is.

I’ll first explain what a dividend yield is, and what affects it. Then, I’ll follow with a super simple example as well as real-life examples, introducing some safe dividend stocks and their dividend yields.

Second, I’ll explain the difference between dividend yield and yield on cost and why they’re relevant to investors. 

Third, I’ll give examples on what makes a good dividend yield, as you may be wondering if, say, a 5% yield is better than a 2% yield. I can tell you right off that that it’s not always the case. 

Finally, I’ll recap the key takeaways at the end.

Read More

How to Read Stock Charts

Although I aim to invest in fundamentally sound companies, I will use technical analysis techniques to help me determine when to buy or potentially sell a stock.

Today, I’ll go over some recent examples of technical charts of growth stocks: Tesla (NASDAQ: TSLA), Amazon (NASDAQ:AMZN), and JD.com (NASDAQ:JD). But these are techniques that you can apply to any stock chart, including dividend stocks

There’s a lot of information here. So, it’s probably better to watch the YouTube video instead and pause it whenever you need to. However, in case you prefer a blog version, here it is:

JD Stock Chart Reading

JD’s recent technical chart is beautiful and perfect learning material so I’ll start with this one.

JD stock chart showing stock bottoming, making higher lows, and breaking out
Figure 1. Source: Stockcharts with author annotation

Figure 1. It bottomed and then consolidated with higher lows before breaking out from the resistance that was marked by its 200-day simple moving average (or SMA) that’s in red.

JD stock chart showing potential bottom signal with relative strength index 30, moving average convergence divergence lines, and consolidation before breaking out above a long-term simple moving average.
Figure 2. Source: Stockcharts with author annotation

Figure 2. Notice that two indicators suggested a potential bottom. First, the Relative Strength Index (or RSI) hit below 30 (so the stock was oversold) and it eventually rose above the 30 mark.

Second, the Moving Average Convergence Divergence (or MACD) had the black line crossing above the red line, which indicated a change in direction of the stock.

The bottom was finally confirmed when JD stock climbed above the 50-day SMA, and it consolidated to eventually break above the long-term SMA.

Read More