2019 was a historic year for the financial markets. Fear and the trade war between the United States and China, cuts in interest rates by central banks, the division caused by Brexit and the general elections in the United Kingdom took center stage.
Nonetheless, US stock markets hit record high price levels with European markets following closely behind. It looks like 2020 is going to be another very exciting year for investors buying stocks.
However, there are some unique challenges ahead and identifying the best stocks to buy will require research, preparation, and access to the right products.
So it seems like a good time to learn how to invest in stocks and what stocks to buy. But, as activity on the global economic and political scene increases, choosing the best stocks to buy in 2020, while keeping the portfolio diversified, will require looking at international markets.
This article contemplates:
- How you can access international markets to build a diversified portfolio
- The best stocks to invest in 2020 for the UK and European markets.
- The best stocks to invest in the United States markets.
- The best stocks to invest in the IBEX 35.
- How to invest in stocks, the best stocks to buy today and how to trade stocks in international markets.
It is no secret that 2018 was a difficult year for the UK and European stock markets. Investors withdrew more than $ 43 billion from the region due to political and economic concerns.
However, last year marked the return of investors to the European and British markets. Confidence has increased thanks to companies that are better prepared for Brexit and the upcoming European elections.
Although some indices set historical records, stocks with high potential are still at very attractive prices! Obviously, we will discover these values together throughout the article.
It was not until 2015 that Volkswagen's "dieselgate" shocked the market. The German automaker admitted to having installed devices in its diesel cars that allowed them to cheat during emissions tests.
Lawsuits, fines and a sales halt have hit the automaker and since then it has done its best to end the scandal and increase its share price, which collapsed by almost 65% compared to its record level. in March 2015, at € 254 per Volkswagen share.
The technical image
The chart above perfectly illustrates the increase in Volkswagen shares in recent months. After the sharp decline linked to the Dieselgate scandal, the start of an uptrend had been halted by resistance at around € 180 a share.
Technical analysis suggests that this bullish trend may last longer as it is supported by a bullish trend line (black on the Volkswagen chart). We can foresee that the price can return to the maximum reached in March 2015 (in green in the graph) during the year 2020.
The fundamental image
After the dieselgate scandal and to deal with numerous lawsuits, the company has already provided sufficient funds to deal with the remaining claims. Volkswagen managed to invest more than 30 billion euros in electric and hybrid cars. An investment that has already started to pay off!
Porsche, part of the Volkswagen group, launched its first luxury electric vehicle, the Porsche Taycan, to compete with Tesla. Other more common urban vehicles have already hit the market, which is good, as governments around the world legislate against gasoline and diesel automobiles.
Volkswagen knew how to anticipate these changes in the market and stay ahead of many competitors. As part of its 2020-2024 plan , the group plans to invest € 60 billion in research for hybrid cars, including € 33 billion for all-electric vehicles. This should enable you to move up among the world leaders in this rapidly changing market.
An option for long-term investors
Therefore, Volkswagen is a stock to buy in 2020. Perhaps one of the most interesting things about Volkswagen is the fact that you will be paid to own your stock. In fact, all public companies pay you to keep their share. For those who do not know it, this process is known as the "dividend distribution".
Volkswagen wants to reward shareholders who trust the company by paying 4.86 euros in dividends per share in 2020. However, this is reserved for those who buy shares in cash. How can you do this? You can use the Invest.MT5 account, which gives you access to 15 of the world's largest stock markets. In addition to :
- Free real-time market data
- A state-of-the-art multi-asset trading platform
- Low transaction fees
- No account maintenance fees
- Dividends on the shares you own
The technical image
GSK's stock price has moved in a lateral range for the past 5 five years (in orange in the chart above). This range was at a key level: halfway between the last maximum reached (green zone) and the last minimum (red zone).
This range is a chartist figure of consolidation, before the resumption of the initial trend, that is, the rise in share prices that began after the rebound in the April 2009 low to $ 982.
The GSK listing managed to break the upper limit of the range around 1730 pounds, hence technical analysis tells us that the rally is resuming and that the objective of the stock price is to return to the all-time highs of the stock. in 2020. It is a positive sign for the purchase of 2020 GSK shares.
The fundamental image
There is a lot to say about Glaxo! But let's make it simple and effective.
Investors have recently chosen a new CEO, Emma Walmsley, to restructure the company, as it has not been productive in research and development of new drugs for the past decade.
Emma Walmsley has already laid off 40% of the company's top executives, and is preparing to split it in two, an operation that will allow stock prices to rise in 2020. For the new director, the goal is to separate the drugs intended for the general public of pharmaceutical and vaccine research.
The goal is to make the stock market price more accessible and to attract investors, while allowing each of its two branches to be more specialized and more optimally managed. Items that should help create great added value for those who want to invest in GSK stocks in 2020.
An option for long-term investors
In addition to offering a great value-added opportunity in 2020, buying 2020 GSK shares allows you to benefit from attractive dividends. If you look at the company's dividend yield, it amounts to 4.72%! Something to add to your list of best stocks to invest in 2020.
Best Stocks to Invest in US Markets
Since Donald Trump won the 2016 presidential election, the U.S. stock markets. USA They have been climbing to the upside, breaking records in 2019. Despite the tariff dispute between the US. USA and China, investors have been enjoying the Trump government's tax cuts. More money for American companies has translated into jobs, economic expansion, and healthy corporate profits.
Growth in general is strong and could be here to stay. Like, Jim Caron, a fund manager at Morgan Stanley Investment Management says: "We are seeing higher productivity and more business investment, indicating that this is not a simple effect related to tax cuts."
So which companies are shaping up to be the best stocks to buy in 2020 for the US markets? ? Let's find out:
Amazon - Buy shares of a GAFA giant
Amazon officially became the second company in the United States to reach a valuation of a billion dollars. That metric alone makes the stock a worthy competitor to the 2020 investor portfolio.
But, there are other reasons that make Amazon special and worth considering as one of the best stocks to buy today, and the best stocks to buy in the U.S. markets.
However, Amazon had an impact on its results for the third quarter of last year, linked to a sharp increase in logistics expenses for overnight deliveries.
Although Amazon's stock has seen a meteoric rise in 10 years, last year's third quarter results disappointed analysts. While Amazon's revenue exceeded expectations by $ 70 billion, earnings were significantly lower than the expected $ 2.1 billion.
Is this a bad thing? Not at all, quite the contrary!
The cost of Amazon shipping services increased by 50% when single-day delivery launched. But in the long run, it is a strategic option that can pay huge dividends for Amazon and its shareholders. In fact, a study of orders placed by users has shown that the faster items are delivered, the faster the user places their next order.
Therefore, this should allow Amazon to maintain its status as a market leader and increase its turnover and profits in the long term and from the year 2020. Meanwhile, Amazon can trust its online data storage service that generated 9 billion of dollars in sales in a quarter, 40% of which was profit.
Therefore, the context is clearly favorable for Amazon, in the short term thanks to its Amazon web service and in the long term thanks to its e-commerce platform. And consider the advice of the legend Warren Buffett : "Buy low, sell high"! Which makes perfect sense here, in 2020, buying Amazon stock taking advantage of the downturn and then the looming rising wave.
Bank of America - Buy Bank Shares 2020
Did you know that Bank of America is the second largest company in the portfolio of the investment firm of Warren Buffett in 2020? The successful investor even increased his stake by $ 1.1 billion last year.
Why is Bank of America on our list of stocks to buy in 2020 (and Warren Buffett's)? Let's see this immediately!
As you can see from the chart above, the 2008 crisis hit Bank of America hard and drove the stock price to its all-time low below $ 3 a share in February 2009. Since 2011, the share price It has started to recover and enter an uptrend. The bullish trend is observed on the chart by a bullish tilt in green. We could even interpret that the price is in a bullish channel.
After a first upward push, prices had entered a consolidation phase and locked in an ascending triangle: a chartist figure announcing a continuation of the current (upward) trend.
Technical analysis therefore tells us that the share price should continue on its way, returning towards the all-time high of $ 55 during 2020! So why not take advantage of it?
In 2020, Bank of America has 66 million clients in the US alone. ! The bank has become one of the leaders in its sector, thanks to its 4,350 shopping centers and its growing online and mobile banking activities. But this situation is completely new for the bank!
With the 2008 crisis, the bank lost $ 134 billion and an additional $ 64 billion in legal proceedings. And that's where Brian Moynihan, CEO of Bank of America, comes in! It managed to restructure the bank, reorienting it to traditional banking activities (loans, checking accounts, credit cards, etc.) while applying a cost reduction policy.
This good management allowed the company to increase its net profits by 4% in the third quarter of last year, bringing them to 7,500 million dollars. Therefore, we can say that the strategy, although it took time and was carried out discreetly, has been worth it! And it's what draws us, as well as Warren Buffett.
Therefore, we can consider that Bank of America could be a candidate for the list of the best stocks of 2020 with great potential to return to its record highs of $ 55 per share.