Posted on | June 15, 2011 | Comments Off
Economic data has indeed indicated slower growth in recent weeks and months and is a primary driver of increased volatility in the markets. Meanwhile, prices continue to rise (albeit at a lower pace), further indicating stagflation is setting in. Stagflation is indeed the prognosis that we have for the economy and firmly believe stagflation will become abundantly clear to the masses in some fashion very soon.
A stagflation environment makes it tough to invest and it definitely warrants defensive investing and dividend investing. Finding companies that sell products through any business cycle and that have a dominant market position in their business is a wise move. This definitely applies to the companies we have in our dividend portfolio.
Furthermore, the volatility in the markets provide buying opportunities that we expect to fully take advantage of. It’s important to let things shake out and not react too quickly. Patience works well in this environment, and patience will pay off mightily in the long-run. Stay tuned…