As an investor, it is essential to always be on the lookout for opportunities to diversify your portfolio and mitigate risks. One way to do this is by considering steady growth stocks that have a low correlation to high-flying stocks like Nvidia. Trivariate Research’s Adam Parker recently highlighted the importance of looking for alternatives to Nvidia to avoid overexposure. In this article, we will explore some steady growth stocks that could be viable options for investors looking to diversify their holdings.
Nvidia has been a star performer in the stock market, with a significant increase in its share price over the past year. However, with concerns about a potential pullback and market volatility looming, it may be prudent for investors to explore other investment options. Parker emphasizes that Nvidia’s upcoming earnings results will be crucial in determining the future trajectory of the stock. If Nvidia reports strong demand and provides positive guidance, the artificial intelligence trade could still have room to grow. However, for investors looking to hedge their bets and reduce exposure to Nvidia, it may be time to consider other growth stocks.
Parker suggests looking for large-cap growth stocks with a low correlation to Nvidia and a positive beta-adjusted return. This criteria can help investors identify stocks that have the potential to outperform the market while offering diversification benefits. Some of the stocks that meet these criteria include Berkshire Hathaway, Eli Lilly, Charles Schwab, Waste Management, and Emerson Electric.
Berkshire Hathaway
Berkshire Hathaway is a well-known conglomerate with diverse holdings across various industries. The stock has shown a low correlation to Nvidia and has displayed strong performance, with shares up by more than 12% this year. As a large-cap growth stock, Berkshire Hathaway offers stability and growth potential to investors seeking to diversify their portfolios.
Eli Lilly
Eli Lilly is a pharmaceutical company that has seen significant growth in its stock price this year. With shares surging by more than 30%, Eli Lilly has caught the attention of investors and analysts alike. The company’s positive performance is further supported by Wall Street analysts, with Citi recently raising its price target on the stock. Eli Lilly’s ability to ride the “GLP-1 rocket” makes it an attractive option for investors looking for steady growth opportunities.
Charles Schwab
Charles Schwab is a financial services company that has demonstrated a low correlation to Nvidia and a positive trend in its stock price. The stock recently reached a fresh intraday high, indicating that investors are bullish on its future prospects. With shares up by more than 5% this year, Charles Schwab offers stability and growth potential to investors who are looking to diversify their holdings.
Waste Management and Emerson Electric
Waste Management and Emerson Electric are two other stocks that surfaced as potential alternatives to Nvidia. Both companies have shown a low correlation to the high-flying stock and have exhibited strong performance this year. Waste Management, a leader in the waste management industry, and Emerson Electric, a diversified global technology company, offer investors the opportunity to diversify their portfolios while benefiting from steady growth prospects.
Diversifying your portfolio is a crucial strategy for managing risk and maximizing returns as an investor. By considering steady growth stocks with a low correlation to high-flying stocks like Nvidia, you can effectively balance your portfolio and reduce the impact of market volatility. The stocks highlighted in this article, including Berkshire Hathaway, Eli Lilly, Charles Schwab, Waste Management, and Emerson Electric, offer attractive opportunities for investors seeking to broaden their investment horizons. Remember to conduct thorough research and consult with a financial advisor before making any investment decisions to ensure that your portfolio aligns with your financial goals and risk tolerance.
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