Investors are worried about a market correction. Even experts are getting nervous, but you shouldn’t. Smart investors know that corrections are perfect times to load up on quality stocks that will grow for decades to come, regardless of what happens over the short term.
There’s one stock I’m keeping a close eye on.
You need to prepare now
This is no time to be messing around. Countless experts are nervous about 2021, including many who are famous because they’re so skilled at calling bubbles.
“This bubble is more impressive even than 2000, which was the champion. About 80% of the value measures have this one higher. We’ll be rather lucky to have this bubble last until May,” warned Jeremy Grantham.
Grantham has called many stock market bubbles over the decades, although he is often a bit early in his predictions. One investor, however, is known for being in the right place at the right time.
“The market is dancing on a knife’s edge,” said Michael Burry, the real-world investor behind the movie The Big Short. Those that listened to his warnings not only sidestepped the 2008 financial crisis, but posted multi-billion-dollar profits.
“People say I didn’t warn last time. I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned,” he concluded in a series of tweets.
Now is the time to prepare. Get your personal finances in order. Top off your emergency fund. And get ready to buy high-quality stocks at bargain discounts.
Here’s the stock I’m watching
High-quality businesses rarely go on sale. That’s because the market knows they’re high quality. If you want to score a deal, you need to be willing to take a chance during a market plunge. This approach feels risky, but if you’re intent to hold this position for the long term, you don’t have to be ridden with fear about missing the exact bottom.
If stocks tank, there’s one company I’m keeping a close eye on: Brookfield Renewable (TSX: BEP.UN)(NYSE: BEP).
No one knows how far a market correction will go. Maybe stocks fall 10%. Maybe they fall 50%. In either case, don’t bet that you’ll catch everything at the perfect time. Instead, stick with businesses like Brookfield. In 10 years, this company is likely to be worth considerably more. The trick is buying in general, not capturing the perfect price.
“Brookfield owns one of the largest renewable energy portfolios of any publicly traded company. Its diverse holdings comprise solar, wind, hydro, and even battery storage,” I recently explained. “It’s a one-stop shop for renewable energy exposure.”
What’s so good about that? Renewable energy is one of the biggest opportunities in human history. More than $10 trillion will be invested worldwide over the next decade. As one of the biggest players, this stock will directly benefit.
The only problem is that Brookfield trades at the high end of its historical valuation range. Shares aren’t necessarily a bad deal at current prices, but if valuations come down across the board, don’t hesitate.
