What Are The Best Stocks To Invest In Today ?

Mon, Oct 7, 2013

Best Stocks To Invest In Today

The best stocks to invest in right now aren’t likely to be where you’re looking for them.

You see, stocks that do well in this type of market aren’t what we normally recommend here at Contrarian Insights.The Best Stocks To Invest

But in one very specific type of market – very much like the one we may be about to enter – these stocks more than double the returns of everything else.

Sound good? Let’s look at history to determine where the Best Stocks To Invest in 2014 are likely to be found.

Best Stocks To Invest In Today: Momentum or Contrarian?

At this point in the stock market rally (which, rest assured that even though we’re more than four years into, it is nothing more than a rally), there are some unique characteristics that will allow a small group of stocks to significantly outperform all others. And those are the Best Stocks To Invest In Right Now.  

Right now, one of the most natural inclinations is to buy stocks on a dip.

This makes sense. The name of the game is buy low and sell high. Buying a dip allows you to buy a bit lower than today.

This works well in bull markets. But there is a specific type of investment that will do exceptionally well in the current market.

What Are The Best Stocks To Invest In Today

With the current market rally four years into its run, we can see the end. We don’t know when it will happen. But we know it will end.

For our investment analysis of what are the best stocks to buy today in short term, we’ll consider we’re in the later stages of a bull market.

Recent research from the Leuthold Group examined what stocks move best in the latter stages of a bull market.

They found in the last year of a bull market the leading stocks (with the best “price momentum”) tended to return an average of 35%.

They also found the stocks lagging stocks (those with the worst price momentum) returned an average of 16.4% in the last year of a bull market.

That’s a difference of 18% in total returns.

The sharp difference in potential returns leads directly into what are the best stocks to invest in right now 2014.

The Only Time It’s Safe To Buy High

So clearly there is a trend here in the later stages of a cyclical bull market for stocks that we’re in right now.

That is to buy the leading stocks. They have the momentum. They’re in place to deliver the best short-term returns.

But this is not Contrarian Investing. Contrarian investing involves doing the exact opposite of buying the leaders. It’s buying the losers really.

However, contrarian investing may be exceptionally safe and profitable, it doesn’t usually work in the very short term.

So if you’re looking for a quick high-powered bang for your investment buck and have an expected holding period of less than one year, go ahead and buy the top-performing stocks.

They’re best stocks to invest in long term.

But don’t plan on holding them forever. When they crash, they will crash the hardest.

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