Interested in seeing some of the stocks on my list? Here are three.

A tech stock I already own

When the stock market slumps, the best shares to buy are often the ones an investor already owns. If you know a company well and you’re optimistic about its long-term prospects, why not buy some more shares at a lower price?

This brings me to Nvidia (NASDAQ: NVDA). I’m already a holder of this stock. But I’d love to buy some more shares at a lower price. If the share price fell to, say, $150 I’d be a buyer again.

I’m pretty confident that this company has a lot of growth ahead of it. After all, the AI revolution is just getting started and Nvidia’s chips are going to be essential for technologies like robotics and self-driving cars.

Of course, there’s some competition emerging in the AI chip space now. So, this is a risk to monitor.

Personally, however, I reckon Nvidia will still be able to sell every chip it can manufacture in the years ahead. My view is that in the long run, its share price is going higher.

Nvidia’s main competition

Zooming in on Nvidia’s competition, one company that’s really gaining traction is Broadcom (NASDAQ: AVGO). It makes custom AI chips for large cloud companies (hyperscalers).

This company has been having a lot of success recently, landing chip deals with the likes of Alphabet and OpenAI. As a result, I’m keen to get the stock into my portfolio.

I’m annoyed with myself for not buying the stock years ago. It has been on my watchlist for ages but I’ve never bought it.

Right now, Broadcom stock looks a little expensive. Near $390, the price-to-earnings (P/E) ratio is around 40.

My target price is $300. That’s where I’d be a buyer.

There are risks around customer concentration. But I think this tech company will do well in the long term.

A low-profile AI stock

Finally, Vertiv (NYSE: VRT) is high up on my list. It’s the global leader in data centre cooling systems.

It’s had a lot of success in recent years on the back of the AI build-out. But realistically, the growth story is probably just getting started as over the next decade, a ton of data centres are likely to be built.

At today’s share price of $185, the P/E ratio here is 35 using next year’s earnings forecast. That’s not actually too bad given the company’s growth rate (revenue is expected to rise 28% this year).

But ideally I’d like to pay a lower multiple to reduce my risk. I’d like to buy in around $150 – that would put the P/E ratio under 30.

New data centre cooling technologies are a risk here. There’s no guarantee that in the long run, hyperscalers will continue to use Vertiv’s systems.

This company has some impressive technology, however. And with a razor-sharp leadership team, I believe it will continue to have success.

The post My stock market crash list: 3 shares I’m desperate to buy appeared first on The Motley Fool UK.

Stressed about the current volatility in the markets? Here are three tips to get through it.

Don’t look at your portfolio so much

At times like this, I tend to look at my portfolio a lot less (I’ve hardly checked my portfolio balances at all in recent weeks). I find this takes away a lot of investing stress.

Having done the research, I’m comfortable with my holdings. I know that I’m invested in some brilliant companies (eg Amazon, Uber, and Nasdaq), which, taking a five-year view, are likely to do well for me overall.

Reframe the situation

No one likes to see the value of their portfolio go down. But here’s the thing – a bit of market weakness can actually be good thing.

The reason why is that market pullbacks let some of the excess/speculation out. This can help set the market up for its next move higher.

If markets keep going up and up without any pullbacks, they tend to experience a sharp fall at some stage. So, a bit of weakness now could be a positive.

Think about the buying opportunities

I’m actually quite excited about the current market weakness. I’m hoping it continues for a bit longer.

Why? Because a decent pullback can create lucrative buying opportunities.

Most of my best investments have been made during periods of market weakness. I’ve followed Warren Buffett’s advice that the time to be greedy is when others are fearful and it has paid off.

I’ll point out that in recent months, I’ve taken some profits off the table to build up a cash pile. So, I’m cashed up and ready to pounce when I see something I like.

A stock I’m looking at right now

One stock I’ve got my eye on is Vertiv (NYSE: VRT). It specialises in cooling systems, power distribution, and advanced server rack technology for data centres and it’s having a huge amount of success at present on the back of the global data centre boom.

Looking ahead, I see a ton of potential here. By 2030, there are expected to be around 8,400 data centres in operation globally against about 6,000 today (an increase of approximately 40%). This expansion should lead to strong growth for Vertiv. Because it offers best-in-class solutions that every single data centre needs (they get extremely hot so cooling systems are essential).

Note that last year, revenue jumped 17%. This year, it’s expected to increase 28% so that’s a big acceleration.

Now, this stock has fallen from $200 to $165 recently. And it’s starting to look decent value as the forward-looking price-to-earnings (P/E) ratio has come down to near 30.

I’d like to buy it a little bit cheaper just to improve the risk/reward skew (a meltdown in AI stocks is a key risk here). I’m hoping I get the chance to buy it for less than $150 in the weeks ahead.

The post 3 tips for handling the current FTSE 100 and S&P 500 wobble appeared first on The Motley Fool UK.

Yes, there are plenty of ways to make that happen. We can rent out a parking space or invest in buy-to-let investments.

However, in my opinion, there’s no better way of earning a second income than investing in stocks and shares.

And as billionaire investor Warren Buffett once said: “If you don’t find a way to make money while you sleep, you will work until you die.”

I think this is a threat looming over all of us. We want to make more money, retire early and enjoy our later life. So here’s how I’d make it happen.

Forget dividend stocks for now

Let’s imagine we have £15,000 in savings and we’re going to start an investment journey with that cash.

The first thing we need to do is be realistic. £15,000 a year isn’t enough to help us earn a substantial second income.

Even with the very best dividend stocks, I could only realistically earn £1,200 annually from £15,000 of investments.

So I have to build my portfolio. I don’t need to be investing in dividend stocks or any type of stock, I just need to invest in companies that I think will help my portfolio grow.

Keep the fire burning

Yet £15,000 is a great figure to kick things off. But my portfolio would grow faster if I made additional contributions. Major brokers, such as Hargreaves Lansdown, allow us to contribute as little as £50 a month. It might not sound like much but it adds up over time.

Equally, if I have more disposable income I could invest up to £20,000 annually within a Stocks and Shares ISA. The ISA wrapper protects my investments from tax, which could be hugely beneficial.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

It’s like adding fuel to keep my portfolio growing. For context, contributing £200 a month could be the difference between having £750,000 after 30 years or £300,000.

The below table highlights how my portfolio — starting with £15,000 and growing at 10% annually — would benefit from additional contributions.

And for context, £749,658 would be enough to generate around £60,000 annually when invested in dividend stocks paying 8% on average.

Picking for growth

There’s no point talking about the dividend stocks I’d buy in 30 years. Instead, I need to focus on the stocks I’d buy today to get my portfolio to grow, like Vertiv (NYSE:VRT).

Why would I buy Vertiv to help my portfolio grow? Well, it’s operating in a highly exciting sector, providing infrastructure for data centres. This sector’s booming, driven by demand for artificial intelligence (AI).

Analysts suggest that data centres will represent 20% of global energy demand by 2025. I think that really highlights the size of the opportunity.

Vertiv also has momentum — it’s up 412% over the past 12 months — and its valuation metrics are still attractive. The company has a price-to-earnings-to-growth (PEG) ratio of 0.74, suggesting the stock’s vastly undervalued.

Of course, the caveat is that the forecast growth may never be achieved. While I’m wary of that, I still think Vertiv is an excellent investment opportunity.

The post £15,000 in savings? Here’s what I’d do to turn that into a second income worth £60,000! appeared first on The Motley Fool UK.