At the beginning of 2022, the S&P 500 index was trading close to 4,800. Almost 18 months later, the index trades lower by 8.7% at 4,374. Clearly, the markets are navigating through challenging times. And investors need to scan for the best stocks for a difficult market. One idea is to invest in blue-chip stocks that are undervalued and have a robust dividend yield. Total returns can be high in these stocks. Another strategy is to invest in massively undervalued growth stocks that have impending catalysts.
Even in challenging market conditions, stocks with positive triggers surge higher. The focus of this column is on growth stocks for huge gains even if the broad market is sideways. It’s important to allocate a part of the portfolio towards growth and penny stocks. This will ensure that total portfolio returns are positive when adjusted for real inflation.
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