In the stock market, knowing what is a 'Buy' and what is a 'Sell' isn't always easy.
However with the local S&P/ASX200 Index (INDEXASX: XJO) near its highest point in over six years and America's Dow Jones Industrial Average (INDEXDJX:.DJI) retreating only slightly from its recent all-time high, stock picking is becoming a more precarious pastime than ever.
So what's an investor to do?
For individuals already exposed to Australia's housing market, there's only two real options in my opinion. Investors can either park their cash in low return term deposits or bonds, or they can risk their money on the stock market.
If you can afford to live without your money for five years or more, I suggest you consider the stock market because, as history has shown, markets normally always return to an upward trajectory, over time.
So what stocks would I buy today?
Here are four companies I've already bought exposure to but would happily do it again.
- Yellow Brick Road Holdings Ltd (ASX: YBR). Yellow Brick Road is a small-cap diversified wealth management company run by a very successful management team, headed by Mark Bouris. Yellow Brick Road has an expanding national footprint and prides itself on superior customer service and competitive pricing. Although not yet profitable, the market is expecting it will become so in the near future.
- Senex Energy Ltd (ASX: SXY) is a Cooper Basin oil and gas producer. Senex has no debt, a huge cash balance, is close to infrastructure, is rapidly increasing its 2P reserves and, best of all, its shares trade cheap. I took a position in the producer just last week.
- Coca-Cola Amatil Ltd (ASX: CCL) is the exclusive bottler and distributor of The Coca-Cola Company's range of products to Australia, New Zealand and Indonesia (to name a few). It has suffered from pricing pressures in recent times and its shares have fallen. In my opinion, this has provided a good opportunity for long-term investors to enter the stock.
- Cash Converters International Ltd (ASX: CCV) is a name Australians know and trust. But Australians are not alone. Cashies already has significant operations in the UK and New Zealand and is also expanding its branch network into South America. However, Cashies isn't just a second-hands goods dealer, its payday loans business is a powerful driver of its earnings and, in the future, I expect its Carboodle business will be too!
Our top dividend stock idea – Yours FREE!
I believe all of these companies are trading at great prices, thus minimising the downside risks should we experience a market correction. Whilst Yellow Brick Road will likely be hit the hardest by a credit crunch, the others have services which will be still be high demand during tougher economic times.
