Stocks Are the Only Asset Class to Own
Stocks Are the Only Asset Class to Own: Josh Brown
Excerpt:
Equities are attracting investors again after November’s sell-off for one simple reason: "There aren’t any alternatives to stocks," says Josh Brown, vice president of investments at Fusion Analytics and author of the popular “The Reformed Broker."
“Stocks are able to go up on neutral, good and negative earnings because of QE,” Brown notes and he recommends that investors buy shares of companies like Johnson & Johnson (JNJ), one of many blue chips that have bond-like qualities. JNJ’s dividend yield is currently 3.4% versus just 1.83% on the 10-year Treasury.Comment: Image source. On the St. Paul and Duluth Railroad.
3 Tips to Build a Strong Dividend Portfolio:
ReplyDeleteMarcin says investors should buy stocks of companies they believe in first and foremost, with the yield coming second. Paradoxically, stocks with high yields can be the least safe on the market. When you see a name kicking off 5 or 6% while the rest of the blue chips are yielding half that, it's a sign that institutional investors are skeptical of both the company and its ability to pay the listed dividend.
If 2 or 3% seems low to you, Marcin begs to differ. Dividends are "the highest current return available compared to anything 'safe'...Treasuires, CDs, anything."
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Stick with quality names and relative safety. "I would feel most comfortable with a whole portfolio of dividend paying stocks paying between 3 and 4%."
Bill Gross’ Tips for “Beating the Wealth Tax”
ReplyDeleteTip #3: Buy stocks that offer steady cash flow and dividends in an unstable economy. Gross says examples of these stocks include Coca-Cola (KO), Procter & Gamble (PG), Johnson & Johnson (JNJ) and Pepsico (PEP). In general investors should buy stocks that have consistent records of growth and can withstand a downturn.