Investing in stocks is a straightforward task, but identifying the right stocks without a solid strategy can be challenging. If you’re wondering which stocks to buy or add to your watchlist, consider Microsoft (MSFT), Nvidia (NVDA), Amazon (AMZN), Snowflake (SNOW), and Steel Dynamics (STLD) as strong contenders.
Despite concerns about inflation and the Federal Reserve’s aggressive rate tightening, the market has defied expectations in 2023, delivering a robust performance. Indexes have rebounded, fueled by signs of a Fed pivot. However, geopolitical events such as the Russian invasion of Ukraine and the Israel-Hamas war introduce additional uncertainty into the markets.
Best Stocks To Buy: The Crucial Ingredients
In a sea of thousands of stocks trading on the NYSE and Nasdaq, identifying the best ones is crucial for substantial gains. The CAN SLIM system provides clear guidelines for stock selection:
- Earnings Growth: Look for stocks with recent quarterly and annual earnings growth of at least 25%.
- Innovation: Invest in companies with new, game-changing products and services.
- Revenue Growth: Consider not-yet-profitable companies, especially recent IPOs, that exhibit tremendous revenue growth.
The CAN SLIM system has a proven track record of outperforming the S&P 500, making it essential for generating exceptional long-term returns. Pay attention to supply and demand for the stock, focus on leading stocks in top industry groups, and seek stocks with robust institutional support.
Once you’ve identified a stock meeting these criteria, turn to stock charts for a suitable entry point. Wait for the stock to form a base, and then buy when it reaches a buy point, preferably in heavy volume. Often, a stock reaches a proper buy point when it surpasses the original high on the left side of the base.
