Most of us think in predictable ways !
And there is nothing necessarily wrong with it. In fact it can help shed light on what's going on or likely to go on in the markets. Bear with me as I walk you down a path:
▸ Yesterday, the Fed did not raise rates and signalled a slower path to rate increases.
▸ So the rates of return on money are going to continue to be pretty much non existent and then evolve into minuscule over the next 2 years.
▸ Which means there is no hope for getting any kind of decent returns from cash sitting in a bank or even bonds (?? I'll cop to not knowing much about bonds but this is the sense I get.)
▸ So investors basically have one decent option to invest their money in: Stocks. That's what we have seen play out over the last couple of years with the bull market, especially in tech stocks.
▸ However, the story has changed...the stock market was flat to negative last year...saw a pretty big downswing (dare I say crash), earlier this year...and the prevailing sentiment is that stuff is highly valued if not overvalued.
▸ Basically investors are finally getting the sense that the easy bull markets, where everything goes up are done and are less willing to take risks on high growth, high return stocks.
▸ Yet, the game of investing is to make money, so in this environment, where do I make money. One immediate answer that jumps out is blue chip dividend stocks.
▸ Some of these like Verizon and AT&T provide > 4% yields but at the same time are fairly established companies that are not going anywhere for a while.
▸ Then there are some like HSBC with over an 8% yield. Holy Cow!! HSBC is interesting for other reasons but more of that in a later post.
So, my theory (and only a theory not a recommendation!) is that we are likely to see a bundle of investors pile into these kinds of stocks over the short term.
▸ However, the story has changed...the stock market was flat to negative last year...saw a pretty big downswing (dare I say crash), earlier this year...and the prevailing sentiment is that stuff is highly valued if not overvalued.
▸ Basically investors are finally getting the sense that the easy bull markets, where everything goes up are done and are less willing to take risks on high growth, high return stocks.
▸ Yet, the game of investing is to make money, so in this environment, where do I make money. One immediate answer that jumps out is blue chip dividend stocks.
▸ Some of these like Verizon and AT&T provide > 4% yields but at the same time are fairly established companies that are not going anywhere for a while.
▸ Then there are some like HSBC with over an 8% yield. Holy Cow!! HSBC is interesting for other reasons but more of that in a later post.
So, my theory (and only a theory not a recommendation!) is that we are likely to see a bundle of investors pile into these kinds of stocks over the short term.
App Pitch:
And while we are on the subject of investing, here's an iphone app to help you keep track of stock market events.
Knotifi : Stock market earnings,product and economic events
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• The contents of this blog are the personal opinions and investment choices of the writer. Please don't treat them as investment recommendations.
• I have long positions in VZ, T.
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