Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

First time visiting? Consider subscribing or the following:

Exercise Patience With Coming Volatility

Posted on | June 1, 2011 | Comments Off

The markets are getting more volatile as the economic data weakens and the Fed quantitative easing efforts near a close (QE2 is scheduled to end in June).  As a long-term dividend investor, it is often said that you shouldn’t try to time the market and that you should just continue to invest in quality companies regardless of price.

While we agree to this to a certain degree, we believe we live in extraordinary times and the markets are poised for extreme moves.  With the historic levels of intervention in the markets, we are likely going to see massive swings in the broad indices.

With the solid bull run that has occurred in recent years, many stocks are overvalued including some of the dividend names we want to own.  While I don’t warrant selling your positions (our goal is to continue to build positions), you may consider pausing and waiting for lower prices.

Take a look at the dividend portfolio to see the stocks we’re watching as well as the target prices we are hoping for in the future.

Meanwhile, if you own gold, you notice that today the Dow plunged triple digits and yet gold spiked.  This continues with our thesis that we’re approaching a Dow / gold ratio of 1 to 1.  We’re still a ways off but this is a good target to keep in mind and will help you determine real value in stocks as we look to continue to invest in quality companies.