The Dow Jones has been stuck in a fairly tight sideways trend over the last two months, and a mixed earnings season has done little to provide that direction. As we enter a historically weak period for the market, investors are left wondering where to turn for market-beating returns during the remainder of the year.
June is typically a tough period for the market, with the S&P 500, on average, losing 1.5% during the month of June over the last ten years. While that figure would have been much better had it not been for a 9% hit in June of 2008, the fact remains that the index has lost money six of the last ten years during June.
Considering the period we are in, it would be tempting to cash out of the market and sit on the sidelines until the end of summer, but I believe that would be a big mistake. While there will certainly be losers during the quarter, there are plenty of stocks out there with the potential of producing solid gains.
We want to be a little more cautious than usual, but with a little homework we can find many stocks that appear to be solid buys. We want to take a look at recent performance, current valuations, and future growth estimates. If a stock passes all of these screens, then they certainly warrant a closer look.
Let’s take a look at five stocks that appear to be in a great position to outperform the broader market through the remainder of the year.