Last week market sentiment was decidedly negative. While the news has focused on turmoil in emerging markets (not a factor), the real question is economic growth in the U. S. As I have said many times, corporate earnings have to be strong in 2014 to justify current market values. Last week\u2019s sell off centered around a PMI report that came in much weaker than expected. My feeling was that the market did not fully consider December\u2019s bad weather, and the affect of mid-week Christmas and New Year\u2019s holidays. This week we have seen some stabilizing technical indicators that imply the market is holding at these levels and is due a rebound.<\/p>\n\n\n\n
In response, for our Dividend and Growth Strategies we have sold off a fixed income position and purchased Ford (F), Altria Group (MO), and GE (GE). I have avoided owning tobacco stocks for 27 years, but at current valuation and a 5.65% yield I had to jump on MO. GE is one of my favorite stocks, and looks better now after an 11% decline and a 3.59% dividend yield. While Ford is more cyclical than I like, it has suffered an 18% decline and is cheap with a 2.72% yield. I am very bullish on the outlook for the aluminum bodied Ford F-150 pickup truck.<\/p>\n\n\n\n
While these purchases over allocate us to equities, I expect to re-balance in a couple of months if not weeks. I\u2019m comfortable that we can ride through a correction due to our relatively high dividend yields and low valuations across the portfolios. If we see the short term rally I expect, we\u2019ll take profits and reallocate back into our 20% fixed income position.<\/p>\n","protected":false},"excerpt":{"rendered":"
Last week market sentiment was decidedly negative. While the news has focused on turmoil in emerging markets (not a factor), the real question is economic growth in the U. S. As I have said many times, corporate earnings have to be strong in 2014 to justify current market values. Last week\u2019s sell off centered around […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[13,6,9,10],"tags":[],"class_list":["post-535","post","type-post","status-publish","format-standard","hentry","category-dividends","category-investing","category-money-management","category-portfolio"],"_links":{"self":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/posts\/535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=535"}],"version-history":[{"count":0,"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/posts\/535\/revisions"}],"wp:attachment":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}