While markets remain volatile, investors can take advantage of the market’s big swings. That includes targeting and buying shares of high-quality, industry-leading companies when the market is down.
With earnings season underway, companies can show how they were faring going into the recent uncertainty, which may point the way towards how they’ll fare once this uncertainty ends. That could lead to great returns for investors who buy great companies that have been hit hard in this selloff.
For instance, Wall Street investment bank Goldman Sachs (GS) is profiting from a surge in trading. That’s likely to increase in the quarters ahead with rising market uncertainty. That’s allowed for a 15% jump in profits, a trend likely to continue.
Goldman Shares took a quick hit with the recent market selloff, but shares are still up 23% over the past year. Yet shares trade for just 12 times earnings, and Goldman is the strongest investment banking brand on Wall Street.
Action to take: Investors may want to buy some shares here, and use any further market weakness to add to that position.
Goldman also pays a 2.4% dividend at current prices.
For traders, with more upside ahead, the July $550 calls, last trading for about $21.20, could see mid-double-digit returns over the coming months. Traders may want to take quick profits on any big one-day move higher in shares given current market volatility.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.