Another market crash may not be too far away with many stocks trading at all-time highs, and the Dow Jones recently hitting the 30,000 mark.
And while you don’t necessarily want to be sitting on the sidelines forever and waiting for prices to come down, you also don’t want to be caught flat-footed when there is another crash in the markets. In March, when stocks went overboard, there wasn’t a whole lot of time for investors to react and scoop up deals. Being prepared for which stocks to focus on in the next crash could mean the difference between a good return and an incredible one.
Here are two stocks you’ll want to put on your watchlist now, as buying them at reduced prices could create a fortune for you years down the road.
E-commerce giant Shopify (TSX:SHOP)(NYSE:SHOP) is rarely a cheap buy. Today, it’s trading at more than 50 times the revenue it’s generated over the past 12 months. A year ago, that multiple was around 30. Investors are paying even more of a premium for the stock today given the impressive growth it has been able to achieve amid the pandemic, with its sales doubling in its most recent quarter.
When the markets crashed several months ago, Shopify stock fell below $450. At that price, many investors would be rushing to hit the buy button right now. The stock has more than tripled in value since then. A $50,000 investment in the tech stock back then would be worth more than $150,000 right now. And when you factor in the future growth that it may achieve in the future, especially as it takes on what could be a risky venture into fulfillment and competing with Amazon, Shopify’s value could continue rising for many years.
If the opportunity happens where Shopify’s stock falls below $500 again, investors should be ready to pull the trigger, as it may not stay that low for long. And even if it doesn’t fall to those levels again, it’s definitely a stock to keep on your watchlist today.
Gold is usually in high demand when the outlook for the economy isn’t great, and that’s likely why shares of Barrick Gold (TSX:ABX)(NYSE:GOLD) are struggling of late; with some encouraging vaccine news getting investors into a frenzy, the stock has fallen 15% in the past month as the TSX’s climbed 10%. But when the crash in March took place, investors were selling everything, including gold stocks. Barrick’s stock fell below $18 a share on March 16. It would go on to double in value before sliding in recent weeks.
However, investing in the top gold company, which Warren Buffett also owns shares of, could set you up for some great returns over the long term. Although it’s underperforming the TSX of late, over the past five years, it has risen more than 200% in value, eclipsing the TSX and its 29% returns over the same period. Unlike Shopify, the stock also pays a dividend, which today yields 1.6%, and that can help give your portfolio an extra boost over the years.
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Fool contributor David Jagielski has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Amazon, Shopify, and Shopify and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.