Finding the right investment opportunity that gives you the expected growth is like gold in investing. And with online trading brokers giving you all kinds of services to help you trade effectively, you have the motivation to get started with the stock market.
September 2020 is the 6th month since the market slipped into recession as a result of the Covid-19 pandemic that paralyzed businesses and transportation globally. But the market has staged an impressive recovery since then, filling investors with the optimism of a Covid-19 cure being developed and businesses getting back to normal functioning. The market has been buoyed overall. But September is here, and Motley Fool analysts wonder whether we need to worry about the traditional September Effect.
Should the September Effect Influence Your Investing?
The September Effect refers to the phenomenon by which stocks experience a slight drop in September. This phenomenon occurs globally. Looking at the past, the S&P 500 has experienced an average drop of 0.5% during September since World War II.
The Dow Jones has declined by 0.8% on average in September. However, they reckon that there’s no point in just speculating. The September Effect, even if it does happen this year, is a short-term phenomenon. But you can find stocks with a long-term potential of beating the market.
Ideas for a Long-term Approach
For a long term approach, analysts pointed out eCommerce, content streaming, and cloud services tech stock Amazon ($AMZN), eCommerce company Chewy ($CHWY), PAD diagnostic device manufacturer Semler Scientific ($SMLR), yet another eCommerce stock Shopify ($SHOP), and fitness company Peloton Interactive ($PTON).
It’s Already Big, but There’s Still a Lot More to Grow
But let’s focus on the giant here, Amazon. The stock is already close to its all-time high, so what’s the point? That’s because there is a lot of potential out there. The pandemic has done little to affect the company’s online sales.
In fact, the second quarter saw online sales rising 48%, while eCommerce transactions generally had a year over year rise of 44.5% in Q2 in The US and 71% globally, as a result of the pandemic forcing people to remain indoors and avoid physical shopping.
The rising demand for Amazon actually forced it to shut down onsite promotions and advertising in 2020’s first half to suppress the demand. But now the company is more than prepared for facing the overwhelming demand.
Remember, Prime Day is coming up in early October, which is sure to see truckloads of sales. The company is also carrying out a 50% expansion of the square footage of its fulfillment network and also increasing its marketing efforts again. In other words, analysts expect significant growth.
With this long-term growth potential, you can forget about short-term glitches. And to get started, you have advanced trading platforms from reputable broker-dealers such as TradeZero to help you.
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