When the stock market goes ape, you always feel better knowing that you own real companies in your portfolio. If you are a speculator, you’ll always want to have some high-flyers, but you can do just as well owning a solid mid- or large-cap stock as you can a penny stock.
A lot of companies we talk about in this column: Caterpillar, Joy Global, LCA-Vision, Global Industries, Goldcorp, etc… are larger- cap companies that have done extremely well over the last year. Many have seen their stock prices double.
It just goes to show you that you can always make money in the stock market, but the hard part is owning the right stocks at the right time.
With the market currently experiencing a negative bias, the mood for highly speculative securities is stark. This is why it is useful to have a mixed portfolio, including some high-flying risk-capital stocks, along with a few mid-caps and a few large-caps.
Some companies that I’ve been following for quite a while continue to make for attractive investments. In the pet care industry, VCA Antech (NASDAQ/WOOF) continues to distinguish itself as one of the best laboratory/animal hospital chains in the country. The stock isn’t a high-flyer, but it has proven itself by providing stockholders with more consistent, steady capital appreciation.
In the eye care business, it is hard to go wrong with LCA-Vision (NASDAQ/LCAV) and Luxottica S.p.A. (NYSE/LUX). Both these companies are benefiting from excellent demographic demand for eye care services.
If you still think there’s more excitement to come in the gold market, Goldcorp (NYSE/GG) is the best large-cap gold company in the business. And if you believe there will be more investment in oil and gas platform drilling, Global Industries (NASDAQ/GLBL) is a mid-cap company with a solid track record of success.
So, when the market is bouncing around based on its daily dose of fear and greed, it makes sense to own some larger-cap, real companies that help you sleep better at night. The age old saying, variety is the spice of life, really works when it comes to investing in the stock market.