As we all know, America was probably the country hit the hardest by the global downturn. The entire world watched multibillion corporations crumble and fall, millions of Americans faced foreclosure and lost their homes, and millions more lost their jobs. America has always been a country of extremes. It is capable of the greatest victories and the most heartbreaking pitfalls. From this, it follows that no country will recover better from the crisis than America, and this prediction is pretty reliable, looking at the bank sector of the United States.
You may be thinking that this is probably the worst time to own bank stocks. If you think that, then you are wrong. Yes, low home prices signal that more people will be unable to meet their mortgage payments, owing more than their houses are worth. More Americans will be forced to walk away from their houses, translating into more foreclosures. With foreclosures, the banks will suffer further losses.
Yet, bank stocks are up and coming – but not just any bank stocks. As early as a few months ago, financial experts claimed that the whole banking system of the United States was set up to print money. From there, you would have to be insane not to buy these shares because the American government was in partnership with the banking sector in a way never before imagined. A few months later, this sector has become pretty prosperous and a lot of major banks, which were facing financial collapse, not only got back on their feet but managed to give back some of the government’s generous support in the form of repaying debt.
There are a number of banks, the shares of which have increased by over 72 percent in the last few months. The first is Goldman Sachs. They paid the government back ten billion dollars and made almost five dollars a share. JP Morgan’s net income totaled $2.7 billion, and the corporation gave $25 billion back to Uncle Sam. Other top players include Citigroup and Wells Fargo. Citigroup shares actually top the list. This is congruent with the extremes theory, as a few months back, Citigroup was at the top of the list of banks doomed to failure. At least this was the outlook before the government intervened. Since then, Citigroup shares rose by 72 percent, reaching a peak at $4 in May. Now they have dropped to $3 each. Wouldn’t you say this is a great time to buy?
Now we come to Wells Fargo (WFC). This bank was the most stable of the big ones, and government support was relatively small. Despite that, this bank’s shares were only $13 each three months ago. Now is a great time to take advantage of the opportunity to get some Wells Fargo stock.
Another winner is Bank Stock TCF Financial (TCB). Their shares have increased by 28 percent in the past year. This bank was somewhat of a black sheep, choosing to reject government support. They amassed major gains in deposits as a result.
How to buy bank stocks? Open an account with an investment or stock brokerage firm and deposit money into the account. Consider the number of shares you would safely buy as well as the price you want to bid. Ask your broker to enter a buy order. If this takes place at the market, the transaction will be completed at the current selling price of the stock. You can also specify a lower selling price. If no sale takes place, your order will be normally cancelled.
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