Elementary-finance.com, a website providing an introduction to finance to those who are looking to learn about investing and being a better consumer, has started building what we are calling the no hassle stock portfolio. Everybody is looking for the next set of hot stocks and we are weighing in on this. In case you missed the first post, here is a brief explanation of the portfolio:
If you enjoy business and love the thrill of the 24 hour news cycle and have a lot of time to read and research, you may be able to get involved in the more risky plays but if you’re like many; you have a job, a family, hobbies that you like more, and when you hear the word, “research”, you run the other way, then something a little lower in the maintenance category may be best for you.
We are picking 5 hot stocks that will allow you to buy them and simply keep a watchful eye. Our goal is to keep them for 1-5 years.
Our first stock was GE. We picked it for you because this truly is a hot stock. It is undervalued based on it’s balance sheet and provides us with a great industrial play that will benefit as their capital division is cleaned up and they take advantage of the Obama administration’s push towards green energy.
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The second of our hot stocks is Home Depot. (HD) This stock is what is referred to as an early cycle play. Many believe that we are in the early stages of the economic recovery. The part of that that makes us like Home Depot is that we are seeing signs that housing has bottomed and people are starting to spend money on their home as they sense that its value is once again going up, they are going to head to Home Depot.. This puts HD in a prime position to benefit. Additionally, under new management, they have tightened up their balance sheet, closed underperforming stores, and improved its inventory systems. The nearly 4% dividend yield is paying you to hold the stock.
From a diversification standpoint, we now have an industrial play in GE and a retail play in Home Depot. Remember that we want you to buy enough shares of Home Depot to make it consist of about 20% of your portfolio. (About 100 shares)
With this, we have 3 more positions to add to our portfolio. We at Elementary-finance want you to spend some time reading and learning everything you can about these stocks. You’re going to hold them for quite some time so we want you to know what you’re holding. A hot stock is only hot if you know how to take advantage of it.
The first book I ever read about investing was Jim Cramer’s Real Money. Click here to go to the elementary finance bookstore to order your copy. You can also take a look at the book in the box above. Although the first book, it is still the book I reread once every year.
If you’re looking for a more extensive fund of hot stocks that is ran by an accomplished money manager, consider checking out Jim Cramer’s Action Alerts Plus portfolio. Jim Cramer best selling author and host of CNBC’s Mad Money and is staff are doing your research for you and all you have to do is buy and sell when they tell you to execute the trade. My secret is that I don’t have enough time to do all of my research so I let Action Alert Plus do it for me. I have made an average of 20 cents on every dollar I have invested.