|
The indicated assets are reasonably stable, secure businesses and have, as a group, an excellent chance to double one's money in the next four years or so. While waiting for that happy outcome, the investor would likely receive an average dividend of 4.47% or more, better than he or she would obtain from 10-year or even 30-year U.S. Treasuries. (If one has reserves only for half of the portfolio, the top five among these stocks, in my view, would be: ITW; ETN; MFC; NOC; and SYY. Their average dividend is 4.28%. As always, we suggest investors check with their financial consultants and/or do their own research before committing funds to any asset mentioned here.)
I am not saying these companies' share prices cannot go down further. In the turbulent tsunami that is the current severe bear market, even good stocks are likely to have repeated wide price swings, that might take them below current levels not once but several times. But trying to time the market's lowest lows is almost always a foolish quest. A better approach is to dollar-cost-average investments in good companies over a period of time. Thus one gradually acquires more shares at lower prices.
So, as Warren Buffett has suggested, this may be the time to begin putting one's investing foot into the water again with good mutual fund or stock purchases, following in each of the next few quarters with additional buys, till, perhaps a year or two down the road, having regained one's preferred maximum level of equity exposure.
You may say that, with so much selling going on, it seems better to stay on the sidelines. But that approach means one will wait till the best bargains have been swept up by others. The idea is to buy low (like now) and sell high. Typically, however, active investors buy once assured by market surges that things are OK once more, then sell after the markets plummet, giving them the dismal results of a buy high, sell low approach. I cannot recommend this strategy!
| |
