Stocks Level Out - What to do Now?
With the passing of the stimulus bill earlier this week, stocks soared. Now they are beginning to level out, but some have stabilized at pretty high rates.
As I've said for the last few weeks - now is still the time to invest. There are a few places I would not invest in, though, and I will start with those options.
Right now many investors have been eyeing restaurants. Some restaurants may be a good investment, and they have been relatively stable among other stocks. McDonald's, for example, has been a good buy - but the future is unknown following the current pandemic. Will people return to their eating habits? Can we expect for people to continue living their daily lives exactly as they did before? I'd bet not.
McDonald's teetered between $180 and $210 over the last year with a steady increase in price. Right now, after the stimulus package, it is selling for around $164. That potential return is not enough for me to make an investment in the company - especially since I do not expect the food industry to bounce back as quickly as others.
On Thursday I recommended investing in entertainment and hotels. They were impacted so heavily that a return is almost imminent - for a quick small return buy some Wyndham. There is another hard-hit industry as well that I would invest in. Oil.
Companies like BP and WPX have been steadily worth twice what they sell for today. Once people are out on the road again I'd expect the value to return. So, this weekend's investment advice: Invest in WPX.