Investing during the Covid crisis: 3 cheap stocks to buy for long-term gains

The Covid pandemic generated panic and uncertainty in the markets, initially leading the main equity indices to a gap of around -40%, partially recovered in less than five weeks: between March and June, investors experienced volatility about a decade on the financial markets. For example, the S&P500, the most important US stock index, recorded the fastest bear market decline ever seen on Wall Street.

If in the weeks following the collapse of mid-March the stock markets recovered quickly, things changed between June and July: something unexpected but also predictable happened, investors remembered that the coronavirus pandemic did not disappear.

A market correction after a strong rebound from a bear market’s lows is perfectly normal. For investors, these setbacks often offer buying opportunities to invest in large companies at low cost. If you want to invest in stocks now, you should perhaps think about what the best cheap stocks to buy should be if a correction were to occur due to a second wave of the pandemic.

Facebook, AT&T and Berkshire Hathaway shares are among the recommended stocks to invest in now, and which should guarantee results even in the event of a second Covid wave.

Invest in Facebook stocks

Investing in Facebook shares, the social media giant, is a very smart move to make when the market is weak and there is a crisis. Although Facebook generates the vast majority of its revenue from advertising, and ad sales decline during times of economic weakness, a short period of weakness shouldn’t scare investors.

Facebook has 2.6 billion monthly active users and 2.99 billion registered users. No matter how good or bad the economy is going, there is no platform that offers advertisers around 3 billion visitors. This makes Facebook a powerhouse in the advertising sector, as well as giving the company incredible pricing power most of the time.

In addition, Facebook Inc. still has large margins for growth. Despite the monetization of the Facebook and Instagram platforms with advertisements, the WhatsApp and Facebook Messenger chats have not yet been significantly monetized. It should also be considered that Facebook is only at the beginning of its expansion in the online payments, streaming and gaming sector and more.

Investing in Facebook stocks is a smart move and a great opportunity for long-term investors.

Invest in AT&T stocks

Why buy AT&T shares? Because there is nothing better than when strong companies are “beaten” during a stock market correction. Mature and slow-growing companies may not seem like attractive investments during growth periods, but almost always these time-tested companies can undoubtedly survive any recession.

AT&T is implementing 5G infrastructures: although updating its wireless infrastructure is long and expensive, the advantages are obvious. AT&T should expect a multi-year technology update cycle and even higher data usage than seen with 4G LTE networks. This is very good news considering that the AT&T wireless division generates a large part of its margin from the data.

Investors should consider that AT&T returns will grow thanks to streaming offers. Although the cut in cable service remains a problem with more traditional services, such as DirecTV, the recent launch of HBO Max should compensate for the weakness of traditional cable services.

Investing in AT&T stocks could make investors sleep peacefully in the event of a second wave of coronaviruses or an ongoing crisis.

Invest in Berkshire Hathaway stocks

When it comes to foolproof long-term equity investments, perhaps there are no better solutions that come to mind than Berkshire Hathaway: Warren Buffett’s holding has averaged 20.3% annual return over the past 55 years, more than double the average annual return of the S & P500, including dividends, over the same time period.

Those who buy Berkshire Hathaway shares entrust Warren Buffett with their portfolio.

Diversification is not exactly Buffett’s strength, which tends to align Berkshire’s portfolio with the United States economy: most of Berkshire’s invested assets are held in traditionally cyclical sectors. While economic slowdowns are inevitable, one thing is certain that the U.S. economy takes much longer to expand than to contract. This bodes well for the composition of Buffett’s investment portfolio.

To consider that Berkshire Hathaway has ended the last seven years valued between 31% and 59% above its book value. Perhaps unsurprisingly, the shares Buffett has most recently bought are … Berkshire Hathaway shares.

Buffett is spending billions to repurchase Berkshire Hathaway shares, a great clue that investors shouldn’t ignore.