Today, Money Morning is bringing our readers the five best stocks to buy for Q3 2016.
These stocks are all driven by big catalysts - like new technologies, powerful trends, or nascent industries - that'll make them long-run winners.
And that "long-run" quality is especially important given current market conditions, where volatility reigns.
Before we get to our best stocks to buy picks, let's quickly look at just how bad this volatility has been in 2016...
It seems like as soon as the Dow Jones Industrial Average makes big gains one week, it quickly loses them the next. The same goes for the Nasdaq and S&P 500, which have both pared their recent gains from last week.
One of the main reasons for this volatility is that the Dow can't sustain its 18,000 level. The Dow has traded at or past 18,000 six times this year. And every time, it has retreated back below 18,000 within a few trading days. In most of these instances, the S&P 500 and Nasdaq typically follow the Dow's pullback.
Just look at what happened on June 8. The Dow closed that Wednesday at 18,005, but it didn't stay there for long. It closed that week down 139 points to 17,865. And the next week the Dow continued to pull back 270 points to 17,733 as of its close on Thursday, June 16.
The S&P 500 and Nasdaq followed similar paths over the same time period, losing 41 and 129 points, respectively.
The VIX index - Wall Street's measure of fear or uncertainty in the markets - shows just how volatile the markets are right now. The VIX is up 7% year to date at 19.55 as of Friday intraday. That's its highest reading since the market correction between January and mid-February,
Even though many investors fear more unpredictable stock market swings this year, there are still plenty of safe and lucrative trades out there.
Take our five best stocks to buy for Q3 2016, for example...
Money Morning Defense & Tech Specialist Michael Robinson has a stock pick that's going to cash in on the U.S. Food and Drug Administration's "war against chocolate."
Robinson also has another stock pick with an exciting new spin-off opportunity for investors in a potential $1 trillion market.
And our Chief Investment Strategist Keith Fitz-Gerald has the best stock to buy before the next Federal Reserve rate hike paranoia sets in...
Best Stocks to Buy, No. 5 - On May 20, the FDA made sweeping changes to the way food companies label their products. It adjusted the serving sizes to show how much people actually eat, and also made companies list any added sugars. You might think that such measures would hurt some food companies, especially those that specialize in sugary, high-calorie foods. But that's not totally true. In fact, many of these food companies are transitioning to healthier food options to compensate for the FDA's new changes. But Money Morning's Defense & Tech Specialist identified one chocolate company that's already making far healthier moves than its competitors. The company is spending $500 million over five years to discover healthy food extracts found in grapes, coffee, and tomatoes. Robinson believes this company's efforts will help propel its sales growth in 2016. The company's stock also pays a nice 3% dividend. Check out this food company and its promising future right here...
Best Stocks to Buy, No. 4 - Close to two years ago, Robinson wrote about a tech stock that would surge based on three catalysts, which he called the "triple crown." He predicted that those combined catalysts would cause this stock to outperform the overall market by a big margin. Since March 2014, the company has beat out the S&P 500 by 8.3%. That's not a bad run at all. But Robinson isn't through with this stock yet. He's found a fourth catalyst that will make this tech stock jump even higher...
Best Stocks to Buy, No. 3 - Environmental activists are known to loathe big oil companies. One bigtime environmental activist in particular, Kenny Bruno, has plans to destroy a big oil company. Last year, he got a $236 million verdict from this oil giant. Now Bruno wants to strike a finishing blow to the oil company, and has laid out a plan to starve it of its $365 billion in resources. Money Morning's Chief Investment Strategist Keith Fitz-Gerald has seen this before, though. And surprisingly, the last time he saw this scheme play out, it lead to returns of at least 273% for investors who watched closely. In fact, Bruno's war on the oil industry reminds Fitz-Gerald of Big Tobacco's legal issues. And that only led to windfall profits for investors who allied themselves with tobacco companies. See why that's going to happen again, but with this oil giant...
Best Stocks to Buy, No. 2 - Most investors don't realize that rising interest rates can actually be good for their money. They just have to know where to find the best stocks under high-interest-rate environments ahead of time. Fitz-Gerald believes the backlash from the next rate hike will present a special buying opportunity. In fact, the last time Fitz-Gerald recommended this stock for rising rates, readers who took his advice saw returns of 41.98%, compared to only 0.86% from the Dow over the same time period. This stock is already up 30% year to date, and could easily climb higher by the end of 2016...
Continue reading for Money Morning's top stock to buy this week...
Best Stocks to Buy, No. 1 - Some of the best technology stocks out there are those that will capitalize on newly emerging tech trends. One of these trends is called the "Internet of Things," and it refers to the new relationship that's forming between everyday appliances and wireless networks. Everything - from your refrigerator to your car - will be connected wirelessly to the Internet. This, of course, is a huge profit opportunity. But Money Morning tech enthusiast Dave Zeiler has researched companies in particular that will reap the most profit from this future $6 trillion market. Check out these auspicious companies right here...