Top Stocks to Invest in 2020
Black Monday on March 9, 2020, and Black Thursday on March 12, 2020, pulled stock investors out of the market. The pandemic brought down the stock market together with the oil price collapse. Companies are announcing defaults and filing for bankruptcy; analysts predict a global recession. Is it time to invest in stocks? Interestingly, yes.
Reasons to Invest Now
The bearish market is always an excellent chance for investors to buy assets as the price declines and they can be bought significantly cheaper. There are three main reasons why you should invest in stocks now.
The risk-off sentiment causes the crash of the stock market. Investors fear putting money into risky assets, such as stocks, amid the unstable global economic situation. Nevertheless, we may see that the situation may normalize soon. Many countries such as Spain, Italy, and the US have almost passed the peak.
As soon as the market begins to recover, the stock prices will move up. Many analysts claim the stock market has reached the bottom. Thus, now it’s a great chance to buy shares at lows now.
On the one hand, the filing for bankruptcy protection, monetary easing policy by world central banks, and huge loans are scaring investors signaling the global economic recessions.
On the other hand, such measures are supposed to help economies all around the globe to recover as soon as the pandemic disappears. So, the markets are already supported, which reduces economic risks.
Low Interest Rates
As the world central banks have been cutting interest rates, stocks have an excellent chance to reduce the discount rate on future profits. At the same time, low interest rates allow investors to borrow more and inject the cash into the economy, supporting such markets as stock one.
The bearish market gives an excellent opportunity to buy assets much cheaper.
Best European Market Shares to Buy
Let’s consider stocks that are supposed to bring huge potential profits in 2020 despite warnings of the upcoming global economic recession. We will start with the European stocks that may become a good investment although the markets are crashing now.
Volkswagen has been suffering difficult times within the past months, not only because of the current pandemic but due to pollution misdeeds. According to the earnings report, the company’s deliveries fell by 37.9% in March and by 23% in the first quarter 2020.
Nevertheless, it is planning to resume production soon as, for example, China’s large enterprises have already fully returned to production. Besides, the company’s stocks have plunged to lows in September 2010, which is an excellent chance to buy at significant lows.
Airbus is among the aerospace corporations that are announcing defaults and firing thousands of employees. A lockdown and border closure are affecting the aerospace company’s income. Although, the corporation has been going through difficult times, it will have a chance to recover as soon as the borders are open.
Airbus has an American rival – Boeing. If we compare these companies, Airbus has more chances to recover than its US competitor, as the European company has public trust. Boeing stocks have been plunging not only due to the crisis but two aircraft crashes.
On par with Volkswagen, the Daimler AG has been going through difficult times as manufactures are closed all over the world. In the beginning of April, Fitch Ratings downgraded the company’s rating. At the same time, the company tapped the debt market, looking for over an $11 billion credit line.
Nevertheless, Daimler AG has even higher chances to recover after the situation stabilizes than Volkswagen. As for April, 2020, part of the manufacturing sector has been reopening around the globe, allowing it to continue producing.
Top US Market Stocks 2020
The US took first place in the number of virus cases. The economy has been suffering a huge contraction leading the whole world into an economic recession. What companies will be able to recover during the year?
The economy has been suffering a huge contraction leading the whole world to an economic recession. Nevertheless, there are exciting opportunities in the stock market.
The Walt Disney Co
Walt Disney was dramatically hit by the pandemic. The company had to close theme parks and cruise ships. Cinemas are empty, and even the sports channel ESPN is showing e-sports and repeat recent cornhole cups. Disney has already fired thousands of workers. According to the data, the company is losing around $30 million per day. However, it’s a chance for investors to buy stocks at a bottom.
Why are we sure the company will recover? It’s one of the oldest companies in the world. Moreover, it has already placed a security debt of $7 billion that will allow it to stay afloat in challenging times. Rating agency Moody’s claimed the company had over $12 billion of unused credit that can be used in case the impact of the crisis effect becomes worse. The stocks will recover as soon as market sentiment eases.
The Coca-Cola Co
Coca-Cola has been under pressure recently, considering the shutdown of supermarkets, and borders closure. Nevertheless, the company will definitely recover when the virus disappears. The Coca-Cola corporation, the same as Walt Disney, is a blue-chip company that guarantees an ability to operate under any market circumstances.
In March, the company managed to raise $5 billion in the bond market. However, analysts believe it won’t need all of these reserves to recover. Moreover, the state of the Coca-Cola Corporation is not as bad as Walt Disney. Although consumer spending has declined and many shops are closed, people will always purchase beverages, especially spending time at home during a global shutdown.
Also, the company is famous for its obligated dividend payments. For all of these years of existence, the company never missed dividend payments despite plenty of market recessions.
Previously, we talked about the companies that are suffering due to the current crisis. Now, we can talk about the company that used the situation in its favor. Contrary to the companies that are suffering due to the global shop shutdown, Amazon gained profits by offering online services. People can order food and other essentials.
At the same time, it’s a great advertisement for the company. If a person has never visited Amazon’s website before, they will experience low prices, fast delivery, and a wide range of supplements firsthand. Thus, the company’s value is anticipated to rise even after the crisis.
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