The 5 Best Stocks In Each Sector Since The Election

The average stock in the S&P 500 has gained 4.43% since Trump won the election on November 8th. Although the pharmaceutical sector tends to trade at a higher multiple than most stocks i.e. at 20 times P/E across cycles compared to most large caps trading at 17-18 times one year forward multiple, valuations of these stocks are justified given the fact that they are known to be Top 5 stocks under $10 to Invest defensive unlike other sectors which are volatile in the current market.

The companies that fall in this category possess the following traits: 1) trade on a national exchange, 2) have a characteristic that gives them a competitive advantage or own its intellectual property, 3) are well capitalized, 4) offer a product or service that is difficult to replicate, 5) have ample capital to execute on organic and inorganic growth initiatives, and 6) are led by a management team with a proven track record.

As at 24 May 2017, shares on the ALSI were trading at P/E ratios of around 19. In the last quarter of 2016, shares in the Top 40 Index were trading at P/E ratios of around 30. The last time P/E ratios were at such elevated levels was in 1994, after which share prices fell back significantly.

For starters, a Canadian investor may be looking to build a portfolio in his/her Tax Free Savings Account or non-registered account, which provides better tax incentives for Canadian companies; or simply looking for familiarity of the companies (people like to invest in companies that they are familiar with, as they potentially understand how the business works, and feel more comfortable investing in them).

If you’re investing in corporate bonds outside a stocks & shares ISA, it’ll fall under the remit of the personal savings allowance This means basic-rate (20%) taxpayers – will be able to earn £1,000 interest with no tax while higher-rate (40%) taxpayers – will be able to earn £500 interest with no tax.

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