Tuesday, August 24, 2010

Its Dark Out There...But There Is A Light

Today the market was hit pretty hard by some unfortunate news: existing home sales plunged to a 11 year low of 27.2%.  The Dow was off about 1.3%, Nasdaq 1.6%, S&P 500 1.5%. The news was that existing home sales were adjusted to a annual rate of 3.83 million from 5.26 million the month before.  You can catch the specific little details at this weblink: http://www.marketwatch.com/story/existing-home-sales-plunge-272-in-july-2010-08-24-101400

Enough of the news headlines that you have already read about... The market is bad, it doesn't take a genius to realize this.  The dreaded "double dip" is a regularly addressed event, not to mention the latest "Great Bond Bubble".  Investors are freaked out of their minds and are running to bonds or cash. 

These are normal everyday topics for Wall Street these days.  I encourage you to listen but take it will a grain of salt.  Is all of this "double dip", "bond bubble" nonsense overblown?  Probably, but it is always to position your portfolio for the worst and accepting the best.  This is a huge key!! I would not be investing in bonds right now because of the uncertainty.  There are just a bundle of great stocks that are better yielding and "safer" than bonds (I put "safer" in quotes because there is hardly such a thing these days).  The stocks that are very attractive in this environment are safe, high yielding, conservative plays, such as what I have listed below:

  • Johnson & Johnson (JNJ) - This stock is yielding over 3% in dividends, which I believe is safe and will not be cut for any reason.  Not to mention this is a good bet for rising interest rates, which will we occuring sooner or later
  • Exxon Mobil (XOM)- XOM has been absolutely destroyed, down 14% YTD, as were all the other oil & gas plays due to the BP oil spill.  I think Exxon is a good company, nice 3% dividend yield, and should rebound to pre-spill levels within a year
  • Coca Cola (KO)- Coke is one of the most recognizable names in the world.  KO operates in 200 countries with more than 400 brands.  Coke's huge international exposure should offset problems in the US.  Coke reported rebounding sales in Asia and Europe in 2Q.  Not to mention a rise in sales in emerging markets.  Coke is well positioned to survive the down economy and emerge stronger.  Ko currently yields over 3%.
Recommended reading:
Secrets of a Successful Trader: http://efbcefae8z307u8cl356zn1-eb.hop.clickbank.net/?tid=BLOGAUG24
Dow Jones Never Loss Trade: http://a87c3lbn9w5z3t27kj83pgtd0a.hop.clickbank.net/?tid=BLOGAUG243

Have any stocks you think are good for this economic environment?  Comment your suggestions!!

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended.  It is always important to do your own research of the stock before you invest.  Invest Chief receives absolutely no compensation from companies that are recommended.  We are a private organization, dedicated to promoting financial well being and prosperity. 

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