It's a tough time to be putting money to work in the market. Stocks may be soaring again for all the seemingly right reasons. As most veteran investors might attest, however, there's something not quite right about the current bullishness. It feels like it could fade as quickly as it took shape, as it did in February and March. Blame the mixed messages from the economy for this.
Still, there are opportunities for investors willing to do a little digging. If I had $5,000 to invest amid current volatility, here's what I'd do.
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Invest $1,500 in Brookfield Renewable
I don't really need dividend income right now. With a forward-looking dividend yield of 4.5% and targeted yearly dividend growth of 5% to 9%, though -- a target the company can conceivably hit -- I'll add Brookfield Renewable (BEPC 1.27%) to help me achieve the net growth I'm looking for. The company is in the right place at the right time to deliver the overall intended net annual returns of between 12% and 15% it's ultimately aiming for. It's just doing so with a combination of income and capital gains.
NYSE: BEPC
Key Data Points
That place is the renewable energy market, of course, which Mordor Intelligence expects to grow at an average annual pace of nearly 14% through 2031.
Invest $1,500 in Pfizer
I don't necessarily expect huge gains from pharmaceutical company Pfizer (PFE +0.43%) in the foreseeable future. And, as was the case with Brookfield Renewable, despite Pfizer's admittedly big dividend yield of 6.5%, I'm not exactly interested in it as an income holding either. I'm just looking for a position that moves independently of the overall market. Most healthcare stocks bring this attribute to the table.
NYSE: PFE
Key Data Points
That being said, there's no denying Pfizer's near- and long-term future looks brighter than the stock's performance suggests. The company's recent quarterly earnings conference call all but confirms that, with a repopulated pipeline and portfolio, it's on track to resume growth in earnest by 2028. Shares could start performing better well before then, however, in anticipation of that turnaround.
Invest $2,000 in Berkshire Hathaway
Finally, if I were looking to invest $5,000 and wanted to sidestep the inevitable fallout from the current volatility, I'd allocate $2,000 to a position in Berkshire Hathaway (BRKA 0.22%) (BRKB 0.53%).
Sure, it's a lazy man's "cheat code" for owning equities. That's not my motivation for stepping into this name right now, however. I'm far more incentivized by the fact that Berkshire shares have underperformed over the past year, as investors have clamored for the artificial intelligence stocks Berkshire largely doesn't own. These same stocks are likely to be the names that unravel the most if things suddenly go south. Investors will be seeking out safety then, and looking for names like Berkshire Hathaway and the tickers it holds.
NYSE: BRKB
Key Data Points
I'm also a fan of Berkshire's cash cow companies like Geico Insurance, Pilot Travel Centers, and Duracell Batteries that aren't publicly traded and, as such, won't drag the value of Berkshire shares lower the way a sweeping sell-off might undermine a mutual fund's net asset value. Roughly one-third of Berkshire Hathaway's current value is made up of these privately held outfits.
