The market had one of its inevitable dips when oil prices soared before the recent Iran war ceasefire. It’s on its way back up, and the S&P 500 is roughly flat year to date. However, the ceasefire looks fragile, and the markets will be sensitive to continued oil volatility.
While investors might choose to stay out of the markets when there’s volatility, that’s not necessarily the right path for everyone. It could be a great opportunity to buy top stocks on the dip, and it could also be an opportunity to scoop up shares of great protective stocks if you don’t have them, or enough of them, in your portfolio.
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If you have $1,000 availble to spend and need either one, I recommend MercadoLibre (NASDAQ: MELI) as a top stock to buy on the dip, and Walmart (NASDAQ: WMT) as an excellent asset to own in periods of volatility.
MercadoLibre operates an e-commerce platform similar to Amazon and serves 18 countries in Latin America. This is a region that’s still underpenetrated in e-commerce, and the company is constantly improving its value proposition to boost the shift to online shopping.
It’s working, and the company continues to add active customers at a rapid pace, as well as generate higher gross merchandise volume and everything that comes along with the shift, like increased items per buyer and higher purchase frequency. Even better, the region still lags other countries, giving MercadoLibre a wider opportunity.
It’s a similar situation with fintech. Management notes that its region has been “poorly served by the traditional financial system,” if at all, and MercadoLibre’s digital wallet has become massively popular. Less than 20% of the population in Mexico has a credit card, and less than 40% of the Argentine population has one. MercadoLibre is harnessing the opportunity with an easy-to-use platform that goes around the traditional system.
MercadoLibre took a hit to profits in the fourth quarter with some heavy investments, and the stock was down 12% this year. That presents an opportunity to buy on the dip, although with $1,000, you can only buy fractional shares.
Walmart stock, on the other hand, is up almost 14% this year, crushing the market. Walmart, as a discount retailer, is a defensive play. When there’s a recession, people rely on it even more. However, it’s really an all-weather stock. It’s the largest physical retailer of its kind, with an unmatched 5,000-plus store base, and it’s increasingly reaching more types of shoppers.
