Spring market correction: Where to invest $1,000 now
The stock market has been on an incredible run over the past 14 months, up about 80% in that time. That’s not surprising in the wake of the pandemic, but stocks are down after peaking earlier this month.
Greater volatility could indicate we’re poised for a spring market correction, and if you have $1,000 to invest you might be wary of making it work for you in the stock market. But that just means you have to be more careful about where you invest. The following two stocks should be considered for that next stock market crash.
Walmart‘s (WMT -0.09% ) The first quarter earnings report underscores its dominance in retail. Not only is its physical presence overwhelming, but its e-commerce business continues to fuel its expansion. Online sales jumped another 37% compared to the first quarter of last year, which marked just the beginning of the pandemic-driven wave of shopping.
It will now face tougher benchmarks as it was seen as an essential business and allowed to operate while its specialty retail competitors were forced to close. But its competitors are much weaker financially because the government shut them down, while Walmart boasts $22.8 billion in the bank.
Walmart is worried it’s losing ground Amazon.com (AMZN -2.46% )but the reports that Amazon will be bigger than Walmart within a few years are skewed because they count all of the e-commerce giant’s third-party vendors in the mix, while Walmart is mostly a sole proprietorship.
Grocery sales fell year after year in the first quarter, but the panic buying that the pandemic sparked made a drop all but inevitable. Walmart still owns an estimated quarter of the grocery market and had $341 billion in grocery sales last year. Second place Krogerthe largest pure-play supermarket, is a distant second with a share of about 10% and sales of about $122 billion in 2020.
A spring market correction is unlikely to worry this retail giant.
Once again Apple (AAPL -3.00% ) proved the naysayers wrong and shook Wall Street estimates of iPhone 12, iPad and Mac computer sales strength.
Analysts had said demand for iPhones had slacked ahead of the earnings report, but Apple reported sales rose 66% in the quarter. The upgrade cycle provided an enormous tailwind for the tech giant, but analysts say demand is set to ease now. Wall Street has a penchant for always thinking that consumers are fed up with Apple products, and Apple constantly proves them wrong.
Nonetheless, demand was at record levels during the period, driving double-digit growth across all categories and all geographic segments. CFO Luca Maestri said consumers are “driving our installed base of active devices to an all-time high.” Apple appears to have perfected its new product launches to coincide with the need for upgrades fueling Supercycle trends that continually boost sales.
Because Apple also developed its proprietary M1 chip that reduces its dependency intelit has also avoided many of the delays and disruptions that plague its competitors due to the chip shortage in the industry.
iPad sales rose 79% last quarter, and the latest versions with the M1 are likely will be on sale this summerwhich will no doubt fuel further gains and top up the nearly $8 billion in sales just made.
Apple also pays investors a very modest dividend, currently yielding 0.7%. That won’t attract very many income investors, but any decline in the stock price due to a market downturn can be at least partially mitigated by the payout.
With over $38.4 billion in cash in the bank, the dividend is secure and otherwise adds to the rationale for parking your $1,000 in its shares.
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