If I had to summarize the current state of the markets, I’d use the term “cautious optimism.” Much of the enthusiasm in the major indices recently has resulted from the thawing relations between the U.S. and China. For roughly a year and a half, the world’s top two economies have duked it out with retaliatory tariffs, hurting the broader investment sector, including notable blue-chip stocks.
Recently both the Trump administration and its Chinese counterparts have opened the possibility of a path forward. As the trade war ticked away months into years, neither side could truly claim victory except in the pyrrhic sense. In an increasingly globalized economy, no major country can truly operate independently. Indeed, the two sides have their own incentives to attain a trade deal, which would lift the case for blue-chip stocks to buy.
Still, it doesn’t hurt to keep expectations in check. Recently, the Wall Street Journal reported that President Donald Trump disputed earlier claims that the first phase of a trade accord would involve tariff relief. Although this doesn’t mean that Trump will back out of the proposed agreement, it should serve as a warning: we’ve seen many head-fakes in the past regarding a possible trade deal.
Because of the uncertainties that remain, I think investors should consider strong blue-chip stocks to buy for their portfolio. Irrespective of what happens with the high-level negotiations, you’ll want names that can withstand pressure. Well-capitalized companies often have multivariate revenue streams. And it’s more important than ever to invest your money in stocks that can weather a potential storm.
With that in mind, here are my top ten blue-chip picks:
Blue-Chip Stocks to Buy: Chevron (CVX)
At first glance, mentioning Chevron (NYSE:CVX) in a list of blue-chip stocks to buy sounds incredibly contrarian. After all, you have companies like Tesla (NASDAQ:TSLA) not only mass-producing electric vehicles, they’re about to launch an EV pickup truck. It would seem that the days of the internal-combustion engine are numbered, and thus, CVX stock.
Over the last few months, I shifted from my bullish stance on EVs and have become increasingly skeptical. A big reason why is infrastructure. As the California wildfires demonstrated, many states have dilapidated electrical infrastructure. In fact, PG&E Corporation (NYSE:PCG) has caused thousands of California wildfires over the past six years, partially due to faulty or old equipment.
Under these circumstances, we’re going to build out an EV empire? I don’t think so. Keep CVX stock on your must-watch list.
Lockheed Martin (LMT)
During the first three years of the Trump administration, we’ve witnessed remarkable events. First, almost out of nowhere, the president sparked a relationship with North Korea’s Supreme Leader Kim Jong-un. Next, he has pushed for closer ties with Russia. Naturally, these two events are not necessarily helpful for Lockheed Martin (NYSE:LMT) and LMT stock.
Still, Trump has made some disastrous foreign policy decisions, including the most recent pullout in Syria. That move betrayed our Kurdish allies and allowed ISIS prisoners to break out of prison. Long story short, armed conflict is never too far away. And such high-level miscalculations imply that we may need to correct mistakes in the future.
Thus, heading into an uncertain new year, I’d keep close tabs on LMT stock.
Investing in blue-chip stocks doesn’t always have to involve playing off negative headlines. Case in point is telecommunications giant AT&T (NYSE:T).
If I had to guess, I’d say most folks love T stock for its generous dividend, where the yield currently stands at 5.2%. Additionally, AT&T will roll out 5G technology for its many customers, which is the next big thing in tech.
But you know what really intrigues me about T stock? The upcoming 2020 elections. Let me explain:
Although criticized for the deal, AT&T bought out Time Warner. Under Time Warner, the entertainment arm owns CNN. Back in the run up to the 2016 general election, the drama that then-real estate mogul Donald Trump generated was ratings gold. Expect even bigger fireworks next year.
Louis Navellier, InvestorPlace’s resident guru on wealth-building, warns that while the bull market is not over there are bumps ahead. To prepare, investors must buy companies — like AT&T — that continue to grow. Louis’ “bulletproof” stocks follow strict criteria, including a stellar track record of providing steady income to investors and market outperformance. See which stocks Louis recommends.
Alphabet (GOOGL, GOOG)
For me, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is just a no-brainer if you’re looking for blue-chip stocks to buy. For one thing, the company veritably owns the internet via its Google search engine. Here’s the deal about Google: nobody uses anything else.
Even hyped names like Baidu (NASDAQ:BIDU) don’t hold a candle to Google in terms of search engine market share. Just this fact alone is good enough to warrant a shot with GOOGL stock.
You want more? Try the other fact that Alphabet is one of the most transformative companies both for today and tomorrow. For instance, its immensely popular YouTube platform provides all kinds of advertisement-related revenue streams. In addition, its next-generation innovations with self-driving cars and quantum computing is virtually unprecedented.
I don’t really like to label investments as automatic, but GOOGL stock comes very close.
Another no-brainer among blue-chip stocks to buy, Microsoft (NASDAQ:MSFT), like Alphabet, offers multiple revenue streams. Primarily, I love their “old school” platforms and services, such as their Office suite. Offered as a Software as a Service (SaaS) format, the company’s programs are indispensable for both professionals and students.
Additionally, MSFT stock will surely get a boost when the tech giant releases its next-gen Xbox console. Over the years, video games have transitioned from the exclusive domain of nerd subculture to a mainstream institution. Therefore, the Xbox will invariably be another cash cow for the company.
Finally, let’s talk about the disruption inherent in MSFT stock. As our own Laura Hoy explained, Microsoft winning the Joint Enterprise Defense Infrastructure (JEDI) contract was a major coup. It sent a message that even in the cloud, MSFT is ready to get down and dirty.
Surprisingly, the loser in the above referenced JEDI deal was e-commerce and tech behemoth Amazon (NASDAQ:AMZN). For some time, it appeared an inevitability that Amazon would win the contract thanks to its cloud market share. However, President Trump’s combative relationship with Amazon CEO Jeff Bezos may have negatively impacted proceedings.
Regardless, AMZN stock is a must-own blue-chip stock. Simply put, the company has too many viable growth pathways to ignore.
Let’s start off with this: when people talk about e-commerce, they mean Amazon. Roughly two-thirds of Americans have shopped at Amazon.com. That equates to 92% of U.S. online shoppers, which at this point means everybody.
Second, when people talk about disruption, they also mean Amazon. The company is in the cloud, and in video games and of course, in your groceries. You can’t stop Amazon, so you might as well just buy some AMZN stock.
Among blue-chip stocks to buy, Walmart (NYSE:WMT) is both intriguing and incredibly risky. You’ll recall that when the trade war was escalating, Walmart and its peers had the jitters. Since the big-box retailer gets a huge chunk of its inventory from China, tariffs would mean price hikes.
And let’s just face reality: most Walmart shoppers aren’t exactly rolling in the dough. Therefore, a poor relationship with China would equate to red ink for WMT stock.
I don’t want to speak too soon because of the trade war’s flip-flopping tendencies. Generally speaking, though, the signs appear positive for WMT stock.
However, the risk is that talks fall through, putting shares in a bit of a quandary. Still, the company specializes in everyday discounts, which might support Walmart in a worst-case scenario.
While the government won’t quite say it, cash is dead. Sure, the benefit of cash is that it’s physical and doesn’t require digital infrastructure to utilize. Unfortunately, that’s also its problem. You must protect cash and that protection costs money. Thus, as digitalization increases in scope, the case for Visa (NYSE:V) and V stock improves in lock step.
That said, cash will never go out of style. In some cases, it’s just easier to transaction with physical currency. But with e-commerce taking a greater share of total retail sales, cash is steadily becoming irrelevant.
Plus, V stock has a cynical catalyst. Americans are not saving enough money. If a recession hits, many folks will need to stretch to make ends meet. Like it or not, that involves whipping out the plastic.
Waste Management (WM)
Naturally, trash is something that most of us don’t give a second thought about: we put our garbage in big black bags and a truck comes by to whisk it all away. But where does all our crap go?
Previously, I thought companies like Waste Management (NYSE:WM) specialized in, well, waste management and that’s exactly their purpose. But landfills are filling up rapidly, and we’re losing space to throw away our junk. And because landfills are becoming premium real estate, you’d imagine that WM stock should rise longer term.
But what I didn’t know until recently? We, along with other developed nations, export our trash to others, particularly southeast Asian countries. But now, this region is understandably fed up with our garbage. This makes the process of waste management even trickier, thereby improving the bullish narrative of WM stock.
Streaming is something that I though understood. I didn’t. From a technical standpoint, I recognized the platform’s utility. But only after buying a Roku (NASDAQ:ROKU) device did I finally “get” streaming. Once you’re converted, there’s no going back, which is what makes Disney (NYSE:DIS) so compelling.
By the time you’re reading this, the Magic Kingdom would have already released their Disney+ streaming service. From every angle, the new platform looks to be a massive winner for DIS stock. In my opinion, no other company has such powerful, compelling entertainment franchises under one umbrella. “Star Wars” alone is good enough to get me thinking about Disney+.
Moreover, I’m beginning to think the service is attractive enough to entice more cord-cutters. The beauty of streaming is that you only pay for what you actually want to watch. And for Disney+, it’s all the shows. Thus, DIS stock is an easy lock for blue-chip stocks to buy.
What other blue chips should you invest in? Louis Navellier lays out his steps for spotting “bulletproof” stocks:
- Follow the money: Buy stocks that are seeing massive cash infusions.
- Protect your portfolio: Invest in market-beating stocks with Louis’ simple trick.
- Go risk-off: Strong fundamentals are more paramount than ever.
Louis’ track record is enviable and stocked with winners, including the following:
- 274% gain in semiconductor stock Nvidia
- 134% gain in defensive plays
- 123% gain in a personnel service stock
As of this writing, Josh Enomoto is long T stock.