Today, more and more people start feeling that relying on a salary is not enough. Navigating through the odds of the modern world, investing in stocks is one way forward. Sure, the stock market suffered a blow once the COVID-19 pandemic hit the globe. Yet, with a strong rebound in sight, it is the right time to restore your faith in stocks. Especially, if you come up with a tried and tested strategy.
With a plethora of stocks being traded on Nasdaq, SSE, and NYSE, you need to have a plan going in. This is especially important in such a volatile market. The good news is that we are here to help. This article offers a quick overview of stock market performance so far. More so, we have used different frameworks to pinpoint the best stocks to invest in April 2021.
Recent stock market trends
No doubt, the economy will bounce back after the pandemic. In fact, the stock market has already started gaining some traction – albeit it remains volatile. April is already proving to be a strong time for the market.
According to Ethan Harris, Bank of America’s head of global economic research, there will be economic growth of up to 10% in the second quarter of the year. A 9% growth in the third quarter and 5% in the fourth will then follow. Let's dial it back to the second quarter of the year, when it looks like more spending will kick in as a result of businesses and establishments gradually reopening.
There is an anticipation that many more businesses will resume after mass vaccinations. This is fuelling further buying power. The Standard & Poor's 500 (S&P 500) reached an all-time high on 1 April 2021, crossing the 4000 threshold for the first time after the first quarter. This is not completely unusual. The second quarter of the year is notoriously more promising for stocks and the S&P has averaged a 2.8% gain in the quarter since 1990.
Considering that the S&P 500 closed out its first quarter with a 5.8% gain, better things should be on the horizon. The only thing that can halt this upward trajectory is if interest rates spike suddenly. With this looming economic boom well under way, the question is: what stocks to invest in?
What are the best stocks to invest in April 2021?
Despite how promising the market seems to be, you still need to have a plan while searching for the top stocks to invest in April 2021. With that in mind, check out some of the best shares to buy now based on our in-depth analysis.
1. Walt Disney (DIS)
Walt Disney is among the top shares to buy this month. Although people may be wary that the company has already reached its all-time high, Disney has managed to maintain an upward trajectory after a hard 2020, recording a 9% increase this year. Currently, DIS stocks are hovering around $190. Yet, there is still room for a further increase as a result of several factors.
For one, the company’s primary streaming site, Disney+, received a boost in viewership once the pandemic hit, bringing the number of paid subscriptions to slightly above 100 million. That means it can go head to head with the streaming giant Netflix. Disney+ is second to none when it comes to content, which has helped it gather the same subscriber base as Netflix in just two years, as opposed the ten years its rival took.
Besides on-screen entertainment, many believe that mass vaccinations (and safer travel) will increase visits to theme parks and hotels. Of course, COVID-19 had a huge effect on Disney’s park profits, with sales dropping as low as 53% – even with parks functioning at a 35% capacity.
Altogether, Disney stock is moving up and has even broken the resistance level it has been tangoing with since 2019. It is expected that it will break above $200 in the months to come and climb up to $230, according to CNN Money.
2. Scotts Miracle-Gro Co (SMG)
Currently trading at $251, Scotts Miracle-Gro Co has been on an upward trajectory since March 2020. For the most part, that's due to the brand's reach and versatility. The gardening and lawn care company has age, experience and brand recognition on its side. It has also broken into a niche by supplying cannabis-growing equipment through its subsidiary, Hawthorne. To round it all up, market sentiment is driving its bullish movement.
Its stock is now higher by 27.20% year-to-date and has even managed to outperform the market. Despite a dip in the S&P 500 at the end of March 2021, SMG stock has been displaying bullish traits. Also in the past year, SMG has gained traction of 130.42% on the market. This has translated to $8.53 a share.
With that in mind, it could be a good moment to key into this upward moving trend before the stock price reaches its high for the year. If you are not yet convinced, analysts from CNN Money predict that the company may reach a median target of $270 by the end of the year. This is substantially higher than its current price. This is flanked by a high estimate of $290 and a low estimate of $240. The analysts, sharing their consensus rating for Scotts Mircale-Gro, also believe it is a buy.
3. Target (TGT)
You have probably shopped at Target. But there is so much more to it than what it offers on its aisles. Trading at around $205 at the beginning of April, there is no doubt that Target is having a better year this year than last. During the peak of the pandemic, it lost a lot of market traction. This was especially due to online retail giants like Amazon.
Nevertheless, it has made the decision to direct funds toward setting up its e-commerce section. In fact, it recently announced that $4bn will be poured into that project a year. That translates to about 40 stores a year, distribution centres, package sorting hubs and new technology. With all this in the works, it is looking to become more profitable, which will push the stock price through the roof.
Altogether, this has not been a bad year for the stock as it has recorded a 16% increase year-to-date. It is forecasted to further spike and as such, you should keep your eyes fastened on TGT stocks this month and beyond.
There is no doubt that last year was tough on the stock market and the economy. But as many countries distribute and administer the vaccine, there is a glimmer of hope that the state of global markets will change for the better. And this anticipation has built momentum, making April the perfect month to get in on the action.
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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.