We hear this a lot at AFN. They see our writing and our actual live plays, and ask “how do I get in?” “The stock market is CRAZY! I have a few hundred dollars, what should I do?” Well, for those of you noobs or first timers, we wrote this for you. Let’s answer the question: “What Stocks Should I Buy With My First $500?”
We want to be honest at AFN. Honesty is the best way to build trust in this industry.
Right now, we believe it is better to create a watchlist of stocks to buy on a dip.
A big dip.
Stocks have gone up pretty exponentially lately, many of which are in the 70-90 RSI levels (overbought to very overbought).
If you were not in the April comeback or the recent September bonanza, it is probably much smarter to wait.
The most important element of making money in the stock market is TIMING.
Below is a list of the biggest movers and what we are waiting to see before we buy in.
If you were one of the geniuses that decided to buy around March, you are probably holding on to some monster profits.
Some of the biggest stock and options moves include:
Tesla, Nio, FCEL, BLNK, JMIA, DKNG, QS, RIOT, MARA, JKS and virtually all of the pot and solar stocks.
These stocks are up BIG TIME.
For example, Tesla is currently trading in the $600 range.
Pre-split, the stock reached a low of about $350.
If there was no split, Tesla would be trading around $3000, for almost a 1000% increase.
Similarly, NIO stock was trading at around $2 at the March lows. It is incredible to think it is currently trading in the $50 range.
That is a 25x return, so congrats to anyone that bought the lows and held.
Both were winning trades if you bought at the time of the article publication.
No need to post the rest of these, especially EV stocks.
The EV boom is on par with some of the biggest asset price increases in financial history.
There is even a good chance they will continue marching onward to moon levels.
However, the moral of this story is that if you wait patiently until stocks hit a major dip to buy, you can make a lot of money.
That is where we are now. Stocks are very stretched and appear to be breaking out.
This could be the case, but in any eventuality, this is not the best time to buy if you are not already loaded on something.
It may seem funny, but the best move right is to wait and build up your watchlist.
Then pounce when stocks get levelled.
Holiday Stonks List
Full disclosure, we do expect a year end rally in 2021 based on the current set up.
That does not mean it is a good time to buy now unless you are looking for a short term, high risk trade.
If you want to buy the major index ETFs, SPY and QQQ, they are modest risk, modest reward.
However, we at AFN are looking for massive gains.
For example, we wrote an article on SUNDIAL GROWERS (SNDL) stock explaining why we had a bullish position.
At the time of that writing, we were averaged in around $0.25.
SNDL ebbed and flowed for a little, then followed a MASSIVE spike.
As of today, the stock almost topped at about $1 today.
This gave us approximately a 400% gain in less than a month.
Similarly, the $1 December18 call options were trading for .05c.
Today, they hit a higher of about .50c, for a 1000% gain.
Congrats to those who got in on that play!
Nonetheless, the moral of this story is:
“the time to buy is when there’s blood in the streets.”Baron Rothschild
Palantir has ripped the faces (metaphorically) off the naysayers.
It was assumed that this business was wildly overvalued, hated by silicon valley, etc and so on.
Currently, the stock is around $26, down a little from the all time high of $33.50.
That is approximately a 350% return peak to trough.
While this may continue to move higher after a light consolidation, our buy zone is $17.
We think this price level, only about 100% from the IPO price, is a great entry point.
This stock is a long term hold, perhaps the alpha of the data industry pack.
QuantumScape, formerly KCAC, now QS through an “SPAC” merger.
For those that do not know, we wrote an article on the merger when KCAC was trading around $15.
It was called “Why We’re Buying Every Dip on the Kensington Capital Acquisition Corp and QuantumScape Merger.”
If you are following along, we bought every dip around $15 and exited today around $50.
This is a personal favorite stock, and there will be many more articles on this particular stock.
The target price level we are looking to buy is around the $20.
Although SPCE has not had a parabolic move like the rest of these, we are pretty bullish on the idea of space travel.
Sounds crazy, but so did every new industry before its time to shine.
Space travel, assuming it is a viable industry in the future, will be well in the trillions of dollars.
There are essentially 5 or so companies in this entire industry.
We are buying any SPCE under $19. Currently trading around $28.
Full disclosure, Tesla is my favorite company ever. I don’t think anything even compares and Elon Musk is the greatest human being of the 21st century. Just a personal opinion.
I personally think it will go to $1000/share, which you can read here.
Tesla is still on a monster tear, breaking out to new all time highs…again!
We are waiting for a major dip, which may not come anytime soon.
Our BTFD level is anything under $400/share.
DraftKings (NASDAQ:DKNG) is my second favorite company.
I have a lot of it, full disclosure.
I have been bullish on it forever and it has paid very well.
Recently, we wrote a bullish article on DraftKings.
Obviously, it has done very well since then, moving from around $35/share to about $53 this week.
We believe this stock will just keep moving higher for a long time.
Check the articles on the topic on our website for the full reasoning.
In any case, IF and only IF, the stock trades below $34 (200 day moving average), we are buying every dip, excluding extraordinary situations like bankruptcy.
Marijuana stocks have also been huge winners from earlier this year.
Many have generated 300-500% gains since the extreme March lows.
As we have written about a few times, we believe these pot stocks are the next big industry level pump.
You can read our previous article here explaining the reasoning behind this.
We specifically like APHA stock, but most of the other pot stocks will probably move in unison.
We are looking for the $6 level to begin buying back in after heavy gains.
Blink Charging (NASDAQ:BLNK) has been extremely depressed for a long time.
The company and its operations have extraordinary potential, in our opinion, as the EV boom continues.
We do not think it is a fad or bubble. Although the EV stocks have gotten way ahead of themselves, it just goes to show the level of investor interest in the sector.
You can read more from the Motley Fool about the company explaining the interest.
We are looking for a pullback to $11 to start accumulating.
JMIA, a somewhat unknown company, has been branded as the “Amazon of Africa.”
As you can tell, the stock has enjoyed some Amazon level gains.
The stock is up about 1000% on the year.
We doubt the pump is over, but are expecting a pullback at the very least to $19.
We would really like to buy around the sub $15 level.
Conclusively, the best thing to do for a new trader is to wait. It sounds ridiculous, because you see lots of flashy numbers moving up and down really fast.
You want to get in, but you might be setting yourself up for failure.
For new traders, you want to WAIT to strike. If you waited until March and bought at the lows, you would be LOADED.
We hope this list will help give you an idea of which stocks and the price levels we are looking for.
Did we answer your question: What Stocks Should I Buy With My First $500?
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Did you see our previous article on Sundial Growers?
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