The coronavirus pandemic and the economic chaos it unleashed has created new opportunities left and right for savvy investors. We’re not talking about investing in vaccine stocks either. The world will be fundamentally changed even after the recovery.
Not long ago, if you saved up $1,000 to invest in stocks, you had just a few choices.
You had to pick one stock to invest in and hope for the best or buy a mutual fund or ETF.
Commission costs, even at discount brokers, were so high that trying to spread your money across a few different companies would cost too much to be practical. Today, with commission-free trading, you can spread your money across three companies and start building a solid portfolio.
Here’s how to do it with three of the best stocks to buy today, including how to balance your $1,000 portfolio…
The Best Stock to Buy Is the Toll Collector of the Economy
For our centerpiece stock, let’s put $500 to work in shares of the company many have called the toll collector of the 21st century. Brookfield Asset Management Inc. (NYSE: BAM) is a $50 billion investment company that invests in everything that makes the world work. Brookfield owns energy plants, infrastructure assets like airports, marine ports, toll roads, real estate, and railroads. If the world needs it, Brookfield probably already owns it.
Last year, it purchased a controlling interest in Oaktree, the distressed debt firm run by legendary investors Howard Marks. Thanks to the economic shutdown, more firms are experiencing difficulty, and distressed investing will be a high return strategy for the next several years.
This makes Brookfield one of the few companies that will actually see an improvement in earnings due to the pandemic. Think about it this way: You’re owning the company that’s got $50 billion of muscle to scoop up the biggest and best opportunities created by the pandemic and shutdown. That’s putting your money to work for you in a big way.
Brookfield also has a large private equity operation that will be well positioned to scoop up assets at bargains prices around the world. In late 2019, it closed on a $9 billion fund, so it has plenty of cash to put to work.
Brookfield is a compounding machine. Over the last 20 years, the stock has averaged about 20% a year in annual returns. One thousand dollars invested in the company in 2000 would be worth over $35,000 today. The next 20 years should be just as exciting and profitable.
This Coronavirus Stock Powers the New Work from Home Reality
Next, let’s get positioned for all the credible growth opportunities that we see ahead of us. Cloud computing, artificial intelligence, cloud computing, the Internet of Things, self-driving cars, 5G, and e-sports are just some of the megatrends that can make people incredibly rich over the next decade. With $1,000, we don’t have the cash to invest in companies in all of these industries.
Since we can’t invest across a range of companies in several high growth industries, let’s buy the one company that will see massive growth opportunities form all of these powerful trends. Intel Corp. (NASDAQ: INTC) is the leading semiconductor company in the world, and its chips will be used in every technological breakthrough of the 21st century.
Intel has been aggressively acquiring small companies that make products that give them an edge in the hottest areas of technology. In the past few years, they have acquired Moovit, a leading Mobility-as-a-Solution provider as well as Mobile Eye, a vision technology company. The combination makes Intel a leader in proving chips and processors for driverless cars.
Intel has made similar acquisitions to strengthen its presence in hot segments of the market, including 5G, artificial intelligence, data centers, and cloud computing.
These trends are going to be especially explosive as companies shift to remote work, where they’ll need cloud data storage, cybersecurity protection, and all the software and tools to make work possible. Intel is the perfect pick-and-shovel play for these new trends.
Intel has no intention of being left behind as hot new markets develop either. Most people are not aware of it, but Intel runs a venture capital fund that provides capital for the hottest startups in the technology industry. Last year, Intel Capital invested over $460 million in emerging tech companies in the hottest areas of the marketplace.
Buying just this one company makes sure that no matter what happens in technology, we make money.
But our best coronavirus stock has the highest upside.
When Warren Buffett says he was betting on America, this is what he meant. This company is essential for the economic recovery.
Bet on America with The Top Coronavirus Stock
With the final 10% of our $1,000 portfolio, let’s make a bet on the recovery of the American economy. Cornerstone Building Brands Inc. (NYSE: CNR) makes the products used to build things. The company has three divisions right now: Commercial, Siding, and Windows. The commercial segment makes metal products due to commercial real estate constructions. The siding and windows divisions are pretty much self-explanatory. Together, Cornerstone is the No. 1 manufacturer of windows, vinyl siding, insulated metal panels, metal roofing, and wall systems, and metal accessories in the United States.
The company took a massive hit in the first quarter as the pandemic began to shut down the economy. The stock is down 30% so far this year and is almost 40% off its 52-week highs. While investors are focusing on the short term, they are overlooking the fact that this company is in solid financial shape with almost $500 million in cash and no near-term debt maturities. They can survive the storm and prosper when the pandemic passes.
The top management at the company certainly thinks so. The CEO and several members of the board have all opened up their checkbooks and made six-figure purchases of the stock since the pandemic hit.
Analysts expect this company to grow earnings by an average of 30% a year for the next five years. That kind of growth can quickly drive the stock to several multiples of the current price. Insiders think that will happen and have backed up their opinion with large amounts of their own cash.
With as little as $1,000, you can build a portfolio that benefits from all the major trends in our world. Whatever happens in technology, this portfolio will benefit. Whatever happens in energy and renewable energy, this portfolio benefits. As the economy recovers and gets back to pre-pandemic levels, this portfolio will be a significant beneficiary.
All great fortunes start somewhere.
Yours can start here.
— Garrett Baldwin