There has been a lot of advice going around lately, in the midst of this market downturn. Investors are being told to buy up on the cheap and to look out for huge short-term earnings. This is all true, I can’t deny it. When you invest in quality stocks, there is a high likelihood that you will see strong returns in the next year.
But what happens after you invest?
Investors might think it looks pretty good to make some short-term gains off a few stocks. After all, the percentage points alone look pretty tempting. If you’re looking at a potential upside of 30%, 50%, or even 100% in the next year, who wouldn’t want that? But what if you could get a return of 300% on your investment? It’s easy. All you have to do is buy and not sell.
Invest in the best
Here’s the first thing you should consider before you invest while looking to sell in the short term. While it might seem like the market is on the mend, there is a high likelihood of another market crash. It might not be as large as the first one, but it’s very likely to come. As earnings reports come in, businesses will likely need to take some action. Layoffs, business closures, and further stress on industries are all likely to come in a new wave of pressure on the markets. Add to that the housing crisis, and you have a market ripe for another downturn.
So if you’re looking to sell in a few months or a year, when is the right time to do it? Unless you’re a professional, it’s far better to invest and hold onto quality stocks that will do well over the long term. How long term? I’m talking decades. That’s what top analysts, and probably your own financial advisor, will tell you to do before considering anything else.
Buy a Buffett stock
One of those top analysts that’s chosen a Canadian company to invest in is Warren Buffett. Buffett’s Berkshire Hathaway owns a 3.32% stake in this company as of writing, and is bullish about its future. It’s not a gold stock, or even an energy stock, but Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR).
Restaurant Brands owns three fast food chains, with Tim Hortons, Burger King, and Popeye’s Louisiana Kitchen under its umbrella. While Tim Hortons has proven less than worthy thanks to poor menu options over the last while, the other two brands have been picking up the slack. In fact, Popeye’s saw an incredible 32% growth in sales during the first quarter of 2020. Furthermore, all three have been pushing forward even during this pandemic.
While other fast food chains struggle to create mobile pickup, delivery services, and other means of getting food to customers, Restaurant Brands already had these methods set up. This has kept sales from crashing, to say the least, and should allow the company to come back strong after the market crash is over.
Meanwhile, investors have a lot to look forward to from this stock if they choose to invest. Restaurant Brands has a potential upside of 38% to reach fair value, with a dividend yield of 4.01% as of writing. The stock has come up 150% from its initial public offering and its highest point before the crash in the last five years. An investment of $3,000 today could bring in about $120 in dividends each year, and triple your investment in a decade.
