He believes that even in turbulent times, there are opportunities to invest money in certain stocks. David Porter says that the key is diversification. He further said that it would be wise to diversify one’s assets across various sectors instead of focusing on one sector/industry.
“You have seen over the last couple of years, people have fallen in love with tech, which has been a very good sector. Mining has done well for people, but then if you are not diversified, your entire portfolio can take a hit when one sector declines,” he added.
He says that it is important to watch the latest happenings in various markets and sectors. One can do so by reading online publications or subscribing to various magazines for this purpose. However, he advises against following the herd because if everyone is doing something, one should probably avoid doing it.
“This doesn’t mean you should go straight against the crowd, but it means that when there are certain sectors or stocks which are in vogue, it is best to be prudent with the money one invests,” he said.
He believes that India will continue to grow over the next few years because of its young population. This will open up more opportunities for investors to make money. He added that global businesses are increasingly looking at India as a major destination for expansion because of the growing workforce and low-cost production.
“It is one of the last large untapped markets in the world, so people are looking very closely at it. And I think you should too,” he said.
Valuation is the most important factor for Porter. He looks at stocks with a low price-earnings ratio for this reason. His top picks are as follows:
Amazon stock has been a star performer this year. The online retail giant is currently trading at an all-time high of over $1,000 per share. It has seen a 40% return since the beginning of 2017. It also sports a price to earnings ratio of 184, which is low. Furthermore, the stock has a dividend yield of 1.09%.
This online retail giant is expected to keep growing for a while now, especially since it faces no major competitor in India. Amazon will probably be able to make even more money from this market in the future.
The mining major has returned over 9% to shareholders this year. It also carries a dividend yield of 4%. The stock is currently trading at $22 per share and has a price to earnings ratio of 17.9. Porter says that there is no reason why this stock won’t continue to break new records.
This tech giant is trading at an all-time high of $80 per share. It has grown by over 20% ($14 per share) since the beginning of 2017 and offers a dividend yield of 2%. Microsoft’s price to earnings ratio is 16, and Porter believes it is a great buy right now.
Ford stock has grown by over 12% this year and carries a dividend yield of 3.3%. It currently trades at $12 per share and has a price to earnings ratio of 7.5. According to research, the car company is expected to grow by over 6% for the next five years, making it a great buy.
Ford has also made some promising announcements recently about how its self-driving cars are improving rapidly. This means that shortly, more people will want to buy these new models since they are completely safe and reliable.
Fingerprint Cards is a high growth technology company that works in biometric technologies. It specializes in fingerprint sensors, with its most popular product being the ‘NexID’ fingerprint sensor. The stock currently trades at 13 times its expected earnings for 2022, making it very attractive for investors.
Samsung’s stock has fallen significantly in the last few months, making it a great opportunity to buy this tech giant. It trades at 12 times its expected earnings for 2022, making it another good option for investors.
According to David Porter, he prefers cheap stocks with high growth potential. He feels that investors should invest in stocks with strong fundamentals because it can be a safer bet. He believes that buying high-priced stocks is a risky idea in the face of volatile global markets.
Stock investing strategies are quite complicated because the investor needs to consider various factors before making a move. The bottom line, however, is that diversification is the best way to invest one’s money.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
Source: FinancialCentre’s Broker