Ever since the market gapped up on Nov. 9 when President-elect Joe Biden unofficially tallied enough votes to secure the White House, enthusiasm has been relatively measured. Sure, the major indices saw record highs but lately, we’re seeing a tapering off effect. In turn, this dynamic sets up a less-than-convincing framework for stocks to buy with $5,000.
Please don’t get me wrong: we’re in this business together to find the right opportunities and profit from them. Still, we can’t be blind to some of the worrying fundamental headwinds. For instance, despite Biden’s win, a mere transition of power isn’t going to solve our problems. Easily one of the biggest concerns is the looming eviction crisis, with the federal moratorium on such expulsions set to expire in January unless the government steps in.
If we don’t get the ball rolling in that department, not only would it be an economic crisis but would probably exacerbate the novel coronavirus pandemic. Therefore, the incoming Biden administration will take over the reins at the most inopportune moment. That’s not to say you shouldn’t consider stocks to buy with $5,000. For that amount, there’s probably no better place to put it then in the equity market.
However, I believe new investors should be reasonable. Earlier this year, we saw benchmark indices tumble as the world braced for what seemed like an apocalyptic event. Fortunately, we were able to manage the crisis, though at great cost to human life. However, if we incur another shock event, we may not have the tools to bounce back so quickly. Thus, prudence is the key for stocks to buy with $5,000.
In this spirit, I’m going to lay out a total of nine companies across various industries. Why nine? To satisfy my penchant for symmetry, I’m splitting these ideas into three segments of increasing risk-reward magnitude, with three ideas each. This way, you can get maximum mileage out of these stocks to buy with $5,000. They are:
- Abbott Laboratories (NYSE:ABT)
- Procter & Gamble (NYSE:PG)
- NextEra Energy (NYSE:NEE)
- Sociedad Quimica y Minera de Chile (NYSE:SQM)
- Qualys (NASDAQ:QLYS)
- Honda (NYSE:HMC)
- Impala Platinum (OTCMKTS:IMPUY)
- Ammo Inc (NASDAQ:POWW)
- Champignon Brands (OTCMKTS:SHRMF)
One final note before we get into it. To stay in the game, more of your money should be allocated toward the safer stocks to buy with $5,000. Of course, nothing in the market is 100% safe — risk is what you need for growth. That said, because the reward potential is huge for the most volatile names, you can get adequate return potential while limiting your ultimate exposure.
Abbott Laboratories (ABT)
When Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) announced that their messenger-RNA-based vaccines were more than 90% effective, it was only a matter of time before the air came out on several speculative Covid-19 wagers. If that wasn’t enough, Pfizer received an emergency use authorization for its vaccine, while Moderna is also on tap to get the green light.
Thus, for stocks to buy with $5,000, I’m not going to mess around too much with direct coronavirus plays. Instead, I’m going with Abbott Laboratories. No, ABT stock has never been the sexy name during this pandemic. But what it does offer is fundamental relevance to its world-class testing platforms. Frankly, for the world to truly return to normal, we’re going to need robust testing facilities.
This will be especially crucial for our broader transportation networks. While government bodies may like the idea of vaccine certifications, that’s a matter fraught with administrative and ethical challenges. Instead, rapid-fire testing can confirm who’s sick and who isn’t. Therefore, ABT stock will be relevant despite the availability of vaccines.
Procter & Gamble (PG)
There’s no denying it: Procter & Gamble is just about as boring of a company you can select for stocks to buy with $5,000. However, I have big concerns about the stability of the economy. Again, President-elect Biden will assume control at probably the worst time in modern American history. You’ll excuse me, then, for not discussing a company exclusively tied to discretionary income.
According to data from HighlandSolutions.com, 63% of Americans have cut back on spending during the pandemic. The top reason for the budget cut is an overall cautious sentiment. Number two was a reduction in salary or income. So, based on this information, it’s easy to assume that buying the latest gizmo isn’t on everyone’s priority list. Cynically, though, this environment favors PG stock due to its underlying consumer staples exposure.
Admittedly, many high-profile companies tied to discretionary spending have done exceptionally well this year. But Highland also notes that 47% have run out of emergency savings during the pandemic. Without government support, such rallies can’t last forever. So, don’t be too quick to ignore PG stock.
NextEra Energy (NEE)
Perhaps the most obvious idea on this list of stocks to buy with $5,000 is NextEra Energy. For years, millions of Americans have stressed the need for clean energy solutions. However, let’s just say President Donald Trump’s administration hasn’t exactly been the most helpful in this regard.
As a prime example, The Washington Post reported that President Trump opened up more than half of Alaska’s Tongass National Forest to logging and other development projects. Obviously, that’s not going to attract environmentalists. But with a new administration about to take over, the narrative for NextEra Energy and NEE stock looks enticing.
On one hand, you have the Biden Plan, which calls for net-zero emissions by 2050. More importantly, the shift toward renewables fosters the acceleration of other technological platforms, such as electric vehicles. Theoretically, this should further reduce our dependency on foreign energy and its possible future supply disruptions.
Lastly, I should point out that investing in NEE stock isn’t about replacing fossil fuels outright. I don’t think that’s politically palatable nor wise. Rather, NextEra complements our energy infrastructure as it accommodates a growing population, making it one of the most viable stocks to buy with $5,000.
Sociedad Quimica y Minera de Chile (SQM)
If this wasn’t the year of the coronavirus, 2020 could very well go down as the banner moment for electric vehicles. At the same time, it may have been Covid-19 that drove EV sales to ridiculous heights. A pivotal advantage of EVs is that they have fewer moving parts than their combustion-engine counterparts. Therefore, the massive supply chain disruption that negatively affected regular cars earlier this year didn’t quite have the same impact on EVs.
In this arena, Tesla (NASDAQ:TSLA) obviously reigns supreme. However, upstarts like Nio (NYSE:NIO) have challenged the status quo, making for an exciting space. After all, competition is what drives innovation forward. Still, it can be maddening to figure out which EV stocks to buy with $5,000. Therefore, I’d just take a bet on the sector with Sociedad Quimica y Minera de Chile. Or more simply, SQM stock.
As a lithium mining specialist, I’m going to warn you off the top that this company probably won’t win environmental, social and governance (ESG) awards. However, the net impact that SQM stock offers via its underlying business should be very positive, essentially replacing more combustion cars with electric.
As you’re probably experiencing right now, working from home has its advantages. From avoiding the bills associated with commuting to not having to shop for office apparel, Covid-19 for white-collar employees has been a strangely profitable time. But it also has its down moments, such as seeing and hearing your neighbors more often than you’d care to.
Perhaps everyone returning to normal isn’t such a bad thing when you break it down. Unfortunately, data from the Centers for Disease Control and Prevention indicates that the coronavirus is simply out of control. This suggests that we’re going to work from home even longer than we anticipated earlier. If so, Qualys is one of the stocks to buy with $5,000.
As a cloud information security and compliance specialist, Qualys is about as relevant of an organization that you’ll get right now. With so many worker bees operating remotely, the “surface area” for cyberattacks has expanded exponentially for many corporations. Therefore, the ramped-up demand for cybersecurity has driven QLYS stock to new heights this year.
Personally, I don’t think it’s done moving higher. Beyond worsening Covid-19 cases, the emphasis on cloud computing means QLYS stock will benefit from robust revenue channels.
While Tesla is the go-to brand in the EV market, the traditional big boys have made their presence known. I’m a big fan of Toyota (NYSE:TM) and its myriad technologies, including efforts into building a workable solid-state battery. Apparently, I’m an even bigger fan of Ford (NYSE:F) because unlike Toyota, I actually own F stock shares. But there’s another name that hasn’t received much coverage lately and that’s Honda.
For those that are looking for under-the-radar stocks to buy with $5,000, Honda might fit the bill. Primarily, I’m enthralled with its upcoming 2022 Honda Civic. Featuring an attractive, mature design that takes cues from higher-end German cars, I believe this will be a big hit.
No, it’s an EV but the reality is that electric platforms are still expensive. Likely, the new Civic will start a little above $21,000, which is great. Thus, don’t be surprised to see some upside for HMC stock.
Also, keep in mind that Honda will leave the Formula 1 racing series at the end of 2021 to focus on its zero-emissions technology. While the glamor of F1 is appealing, it just doesn’t make business sense. Basically, Ferrari (NYSE:RACE) will win on the track but HMC stock will win on the charts.
Impala Platinum (IMPUY)
If you’ve followed my work over the years, you’ll know that I’m a big fan of precious metals. I don’t necessarily subscribe to the end-of-the-world outlook that such holdings conjure up. Rather, I think it’s wise to spread your bets across multiple, disparate markets. Honestly, you just never know where the chips may fall, especially during this period.
But now that we’re in the speculative third of this list of stocks to buy with $5,000, it’s time to explore the road less traveled. In this case, I’m bringing you Impala Platinum and specifically IMPUY stock.
Headquartered in resource rich South Africa, Impala is one of the leading producers of platinum group metals (PGMs), primarily platinum and palladium. With gold prices hovering around $1,800, platinum at roughly $1,000 is a steal, considering how rare the latter is. I wouldn’t be surprised if we see safe-haven demand pile into PGMs, which would be a net positive for Impala.
Also, IMPUY stock is levered to next-generation transportation technologies. Mainly, some automakers are betting big on fuel cells, which require PGMs. This should provide a nice long-term lift for Impala.
Ammo Inc (POWW)
While many Americans are kind-hearted people that won’t hesitate to help their neighbors, the broader truth is very complicated. We saw this complexity play out with the novel coronavirus. Predictably, the “normals” rushed to the grocery store to stock up on toilet people. Arguably, the real normal people stocked up on firearms, leading to record-breaking gun sales.
This didn’t surprise me in the least because the fear of the unknown is one of the biggest motivators for survival instincts. But now that we’ve gotten used to Covid-19 in some ways, is it time to start thinking more rationally with our stocks to buy with $5,000? Not unless you want to deliberately ignore the signals in front of you, which is why speculators ought to consider Ammo Inc and POWW stock.
Principally, this is a matter of good economic sense. Not everyone interested in self-defense will buy a gun (because they probably own a few firearms). But everybody needs ammunition, from the first-time buyer to the bunker-diving Alex Jones listener.
Second, the political rhetoric is getting very dangerous. The idea that white identitarians wish to control the conservative narrative is now out in the open. All I can say at this point is arm yourself with POWW stock.
Champignon Brands (SHRMF)
If I’m going to be known for anything, it’s that I was the first person on InvestorPlace to discuss the myriad benefits of psychedelic stocks. On April 29, 2020, I discussed quirky stocks to buy for the new normal. Among the growth names was MindMed (OTCMKTS:MMEDF). Basically, if you bought at the time of publication, you’d be sitting on a ten-bagger or close to it.
However, I’m not sure how long this crazy run can last. Therefore, investors ought to consider Champignon Brands. Though SHRMF stock seems to be tied to a controversial narcotic, the reality could be that the underlying medicinal firm is sitting on a gold mine.
For starters, the psychedelic industry will be exclusively for medicinal purposes. While that negates the possibility of a recreational market, this limitation is actually beneficial for SHRMF stock since it prevents just anyone from competing against Champignon. Essentially, the company can be part of a very exclusive club offering organic therapeutics, a sector that was already exploding higher thanks to legal cannabis.
Furthermore, the White House victory of President-elect Joe Biden confirms that the country is becoming much more progressive. With alternative medicines no longer carrying the stigma it once did, Champignon should have a healthy road to tremendous profitability.
On the date of publication, Josh Enomoto held a long position in F, platinum, palladium, gold, MMEDF and SHRMF.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.