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As the market continues to tumble, we're starting to see some stocks drop into very attractive levels for buying the dip. I'm not sure whether we've hit the absolute bottom yet, but we're starting to get into a period where investors need to be looking at stocks that are going to rebound the fastest from the overall downturn.
I've said it before, and I'll say it again - the trick here is to keep it simple and look at the 101-level economic picture of a particular company. Solid revenue and profits, high net income available to common shareholders, consistent record of growth, decent dividend yields just for holding the stock.
Also look for sectors that produce products we know are going to be in high demand: energy, commodities, household goods, and so on.
It may take between 18 months to two years for the recovery to play out, but if your money's in these kinds of companies, you'll be first in line for a great payday when the market rebounds.
With that in mind, I've got four recommendations for you this week, to help you get your portfolio back in fighting shape. Three are solid no-brainers according to my advice above, and one is a speculative play in banking where recent corruption scandals are creating a window of advantage for investors.
Watch this video for the tickers...
It's more important than ever for investors to find ways not only to preserve existing capital but position themselves for the best gains when markets recover. As I said in the video, banks are one area where investors are taking refuge.
But we've identified two additional key market sectors where a new flood of buying is going to create opportunities for potentially massive profits, especially in small-cap stocks that often get overlooked by the major players.
I have a strategy to narrow thousands of these stocks down to the few with the biggest potential to be the next market winners.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.