By Dennis Coppola
Which stocks do I buy? What is the strategy of buying and selling stocks? These are common questions that many investors or potential investors have.
There are lots of strategies on buying and selling stocks. The most general strategy is to buy low and sell high, but how do we know if we bought low or sold high? The answer to this question for long-term investors can be found by analyzing not where the stock has been, but where the stock will go in the future. We are at a point in time where we are in a bull market, where economic data and the stock market are surging. Some investors predict the market will go down, leaving them penniless.
However, after conducting heavy research on the Internet, my predictions are that in 2004 we will continue to see strong economic data with more jobs and continuing upward drive of the (^DJI) Dow Jones industrial and NASDAQ (^IXIC) (National Association of Securities Dealers Automatic Quotation System) indexes.
According to the Yahoo! finance Web site, (www. finance.yahoo.com), as of January 26, the 52-week high of the Dow Jones Industrial soared from 7416 to 10,499 points. Although the Dow Jones Industrial has had a great uphill run, the Dow Jones Industrial will reach levels of 11,500 points within a year.
In addition, the NASDAQ’s 52-week range also climbed from 1325 to 2063 points. The NASDAQ should climb to 2500 by year end.
When buying stocks in this market the major thing to focus on is growth potential. My top four recommendations are Microsoft Corp. (MSFT), AT’T Wireless Services (AWE), Lucent Technologies (LU) and Citigroup Inc. (C). All four of these companies are growth potential stocks that will be significantly higher in one year.
Microsoft Corp. is one of the 30 stocks on the Dow Jones industrial index. It continues to dominate the computer software business, and right now, it is about a $29 stock and has the potential to rise to $40-45 per share in a year. Another strong buy is AT’T Wireless. It has had takeover offers from Cingular, T-mobile as well as a three-way merger. If AT’T Wireless were taken over then its price would rise immediately.
Lucent Technologies has been on a comeback recently. In March 2003 the stock was at about $1.50, but now the stock has climbed above $4.50. Within a year Lucent Technology could be between $8.00 to $10.00 per share.
Citigroup, the largest global financial services company, has recently posted a great quarter as earnings increased. It not only has growth potential, but also distributes a 3.14 percent dividend yield per year.
The hottest stock on this list is AT’T wireless services. According to the Web site, (www.thestreet.com), the no. 3 cell phone service has given potential buyers a Feb. 13 deadline to submit its final proposals for takeover.
AT’T Wireless is frequently among the top actively traded stocks. Because of the threat of takeover, this stock is one of the hottest on the market.
Due to the recent positive jobless claims reports and overall economic data we will see slow upward movement in the Dow Jones Industrial and NASDAQ indexes throughout the year.
– Dennis Coppola can be reached at
