The market has been getting absolutely clobbered for the last year or so. Some very big names are trading at extremely low prices. Will some of them end up going out of business? Perhaps.
But that shouldn’t deter you. Taking a few chances with some of your speculative portfolio money could lead you to windfall profits.
I’m not talking about buying penny stocks that rarely return anything more than a headache. I’m talking about household names that have just been beaten down for a multitude of reasons. The list I ran through a stock screener of companies with a market capitalization of over $1 billion and share prices less than $10/share returned 221 results.
I don’t want you to go crazy and buy up thousands of shares of companies like these. You should still be prudent and diversify. As an example, you could invest $100 in 10 of the following 16 companies. You would have $1,000 invested, and would need only a few to pay off to get a great return.
Under $10/share (as of 11/21/08):
Dell Computers (DELL)
Applied Materials (AMAT)
Under $5/share (as of 11/21/08):
Sun MicroSystems (JAVA)
General Motors (GM)