Good morning everyone, been a busy few weeks for me and I have not had much time to update this website, however today I would like to discuss with you which stocks I am planning on buying the month of June 2019, as you may be well aware, there have been a lot of trade war talks and the markets are fearful which presents a great opportunity to buy stocks at a discount, I am actually happy that this happened because stocks have been going up for a while and I have been looking for a good entry point.
Now, when it comes to stocks I have a few things that I look for and I have criteria that I like to meet before adding more shares to my portfolio, if the stock that I am interested in meets that criteria then I will go ahead and add more shares that day, I am lucky enough to use Robinhood as my investment platform because I pay $0 commission fees which is great because I can buy shares and average down if needed without worrying about any fees, here is what I look for when buying stocks, as always use this information at your own risk and only buy stocks based on your own research.
Am I paying less than my original entry point?
Does this stock pay a dividend, what percentage does it pay?
Do I like the companies business model and will they increase their revenues in the future?
Does the 5 year chart show an up trend or a down trend?
How big is my position compared to my overall portfolio ?
Is this the best value or are there other stocks that provide better value?
What do people say about the company and how innovative are they?
Which company meets this criteria right now?
So the company that I have my on right now is Caterpillar with a ticker symbol $CAT – This company has been trending down for the past few weeks which in my opinion offers a great opportunity to either average down or have a good entry point, the main reason for the stock to go down is because of the potential for a Trade War with China and other countries, the market worries that both sides will not come to an agreement and the stock has gone down since it all started, since I already had a position in my portfolio this is an opportunity for me to add more shares at a discounted prices.
Why do I like Caterpillar? Here are some of the reasons why I will be buying more shares of this stock.
They pay a good dividend which has been increased throughout the years
I am paying less per share based on the recent decline
They have a good balance sheet and they are diversified
They provide a service which has high demand and a recognizable brand
They have been in business for a long time
These are the reasons why I will be buying more shares at a lower cost than my initial entry point, I am currently investing for the long term and I can see myself holding this stock for the next 5 to 10 years, as share prices fluctuate I will collect the dividend as my position grows based on my cost.
Now, investing in companies and picking stocks comes with risk, share prices could go up or down depending on many factors, here are some of the factors that can push share prices even lower, for me it comes to a point where my position will be high enough where I will stop adding more shares, even if prices are lower, in that case I will simply wait until prices recover, in that case I will wait and collect the dividend payments until the price recovers, I never sell at a loss.
Some of the potential for this stock to drop even more are the trade war threats between presidents, growing competition and a decline in the construction industry, Caterpillar does offer other services that are not depended on just selling heavy equipment however any kind of trade tension will affect share prices.
Overall, I see this stock as a solid investment at a discounted prices that will continue to pay dividend for many years to come and I will continue to add more shares until I grow my position to a point where I am comfortable.and move on to the next stock.
What is your opinion on this topic? Do you agree or disagree, feel free to leave a comment and share your 2 cents, if you are new to investing and would like to open an account to start buying and selling stocks feel free to checkout Robinhood.