Morgan Stanley (MS)

Morgan Stanley
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Like its financial-sector peers, Morgan Stanley had a solid bull run from last November to this August.

More recently, though, shares weren’t able to maintain that upward momentum. In fact, the stock is down about 10% from its August high.

“This company has done everything right during this period, but because of the inane rotation out of the financials, the stock has been crushed,” Cramer says.

He points out that the investment banking giant was trading at just 12 times earnings, a very inexpensive valuation in today’s market — especially compared to the high-flying tickers on the Nasdaq.

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Centene (CNC)

Centene website
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Cramer says Centene has been one of his favorite health insurers “for ages.”

Centene stock is up 17.6% in 2021, which lags behind the S&P 500’s 28.5% gain year-to-date.

Yet Cramer argues that because Centene mostly manages government-run health plans, it would “benefit enormously” from any expansion in Medicare or Medicaid, which the Biden administration supports.

In the third quarter, the company’s revenue grew 11% year-over-year to $32.4 billion. Management expects full-year revenue to come in between $125.2 billion and $126.4 billion.

If you’re unsure about Cramer’s picks — or picking individual stocks in general — some investing services can build you a blue-chip portfolio automatically just by using leftover change from your everyday purchases.

Johnson & Johnson (JNJ)

Johnson & Johnson logo with syringe
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Johnson & Johnson has pulled back about 12% from its high in August, and its recently announced plan to split into two companies didn’t do much to help the stock price.

Still, Cramer likes the health-care giant for its dividend yield, which stands at 2.7% at the moment.

He also points out the potential of JNJ’s pharmaceutical business after the company spins off its consumer products division.

“The pure-play drug business that will be left will be the fastest-growing big pharma company in the universe. It should become an instant market darling,” he says.

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United Parcel Service (UPS)

UPS vans
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E-commerce was already one of the fastest-growing segments in the market, and the pandemic-induced stay-at-home environment only made online shopping more popular.

Cramer points out that freight companies like UPS are what make e-commerce possible in the first place.

UPS posted solid earnings last month. In the third quarter, consolidated revenue grew 9.2% year-over-year to $23.2 billion. Meanwhile, adjusted earnings per share rose 18.9% to $2.71.

Management has projected a strong holiday quarter, and that’s got Cramer giddy.

“With the rails roaring, I think that UPS is now going to catch fire, a fire that burns for days if not weeks into the Christmas holiday,” he says.

Yes, UPS currently trades at nearly $200 per share. But you can still get a piece of the company using a popular app that allows you to buy fractions of shares with as much money as you are willing to spend.

A fine asset with market-beating performance

Andy Warhol gallery
Sergei Bachlakov/Shutterstock

Picking stocks is not easy, and even experts like Cramer don’t get it right 100% of the time.

If you want to invest in something with huge upside potential that also has little correlation with the ups and downs of the stock market, you might consider another overlooked asset: fine art.

According to the Citi Global Art Market chart, contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years.

Investing in fine art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich. But with a new investing platform, you can invest in iconic artworks, too, just like Jeff Bezos or Peggy Guggenheim.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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