(0:45) – Current Investment Strategy: Should You Be Trying To Time The Stock Market?
(9:30) – Learning From The 2008 Financial Crisis
(14:40) – Looking For The Bull Sectors: Where Should You Be Investing?
(25:00) – Episode Roundup: XLE, XOM, CVX, BP, TTE
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Welcome to Episode #333 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo to discuss the stock market sell-off and market timing.
Do you think you can sell, move to the sidelines, avoid the sell-off AND buy at the bottom only to ride the market to new height in the next bull?
Some of you apparently think you CAN based on discussions Tracey has seen on Twitter. But history has shown it’s nearly impossible to time the market bottom correctly and that if you “miss” 5 of the biggest moves higher by the S&P 500, you will underperform.
Trading the Market Bottom
Many will try to time it but few will likely succeed. In 2008, per his New York Times op-ed, Warren Buffett started buying stocks in Oct 2008.
He said he didn’t know when the bottom would come and wasn’t trying to time it. But he knew that in 3 years, 5 years or 10 years earnings were likely to be higher on American businesses.
Turns out, he was too early. The S&P 500 didn’t bottom until Mar 2009, fully 5 months later.
Few will be able to get the bottom just “right.” Even Buffett could not during the financial crisis. Why try?
Energy Continues to Out Perform
Instead of trading the negative story, of finding the bottom, why not trade those sectors where there is something bullish going on?
Energy is actually up this year. The Energy Select SPDR ETF XLE is up 51% year-to-date. And on top of that, the XLE is actually paying a dividend yielding a juicy 4.25% yield.
The XLE has an expense ratio of just 0.1%.
But investors in the XLE should be aware that two positions make up 43% of the portfolio. They are ExxonMobil and Chevron.
If you don’t like ETFs, these 4 big oil stocks are cheap and mostly have high Zacks Ranks as earnings are expected to soar in 2022.
4 Big Oil Stocks for 2022
1. ExxonMobil XOM
ExxonMobil has beat 3 out of the last 4 quarters. Shares are near 5-year highs, up 68% year-to-date but are still cheap.
ExxonMobil trades with a forward P/E of just 7.6. It also pays a dividend yielding 3.6%.
It’s a Zacks Rank #1 (Strong Buy). There are only 244 #1 Rank stocks currently. It’s an exclusive list.
Is there still time to get into ExxonMobil?
2. Chevron CVX
Chevron has beat on earnings 2 out of the last 4 quarters. It was recently a Zacks #2 (Buy) but has fallen to a #3 (Hold) just ahead of its next earnings report.
Shares of Chevron are up 42% year-to-date but remain cheap with a forward P/E of 9.
It also pays a dividend, currently yielding 3.5%.
Buffett has been buying Chevron stock this year. Should you be too?
3. BP p.l.c. BP
BP is a British Big Oil energy company that has beaten on earnings 6 quarters in a row. But shares have underperformed most of the other Big Oil contemporaries, with shares up “just” 15% year-to-date.
BP pays a bigger dividend than ExxonMobil or Chevron, however, currently yielding 4.4%.
It’s dirt cheap, with a forward P/E of just 3.6.
Is this a buying opportunity in BP?
4. TotalEnergies TTE
TotalEnergies is a French Big Oil company that has been in business since 1924. Shares have struggled this year, however, but are still up 4.3% on the year.
Earnings are expected to be up 119% in 2022 and shares are cheap. TotalEnergies trades at just 3.5x forward earnings.
TotalEnergies also pays a dividend, currently yielding a juicy 5.2%.
Europe is struggling with energy supply issues this year and winter is expected to be challenging.
Should investors stay away from TotalEnergies even though it’s a Zacks Rank #1 (Strong Buy)?
What Else Should You Know About Trying to Time the Market During Bear Sell-Offs?
Tune into this week’s podcast to find out.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BP p.l.c. (BP) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Energy Select Sector SPDR ETF (XLE): ETF Research Reports
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
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