No one likes to witness a market correction. Watching the overall market fall into correction territory can unnerve even the most seasoned investor, but corrections are normal, and many analysts would argue they are even healthy for a long-term bull market.
While it can be frustrating to watch your portfolio shrink in value during a sell off, a smart investor will accept that pullbacks are necessary, and instead of pulling out money in a panic, will instead use the selloff as an opportunity to pick up some quality stocks at a discount to their recent price.
Make no mistake about it, the overall economy remains on solid ground. Unemployment is low, and wages are finally starting to rise. This is good news for the overall economy, but the market reacted negatively to wage growth out of fear that it would prompt the Federal Reserve to lift interest rates at a faster pace than previously expected.
Of course, higher interest rates will have an impact on the stock market, as money flows out of stocks and back into more traditional fixed-income assets as rates rise, but as long as the overall economic conditions remain intact, there is no reason to expect the market to all of a sudden switch to bearish.
In my view, economic conditions remain upbeat, and corporate earnings should get a nice boost from the recent tax reform that lowered corporate earnings, and allowed for a tax holiday on money brought back to the U.S. from foreign operations.
If you are afraid of the market after the last week’s volatility, perhaps you should sit on the sidelines and wait for calmer waters, but if you want to use the selloff to pick up some high-quality stocks at a discount to their recent level, here are five stocks that have come down in value and are very attractive at their current levels.