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The Weekly Lineup: Dividend Stocks Overpriced Edition?

So here’s the bottom line. Stock markets have had a good run-up this year. Long term investors feel stock prices are becoming overvalued, and investors who bought equities this year are getting nervous. So what’s an investor to do? Sell in May, sit on cash, or just keep buying great companies with a long term view? That’s exactly what I had in mind with this weekly lineup.

The Weekly Lineup

Sell in May and Go Away? A phenomenal article by Louis Basenese, chief investment strategist at Wall Street Daily, tells you exactly why you should not implement the strategy. In, Sell in May? Not According to These Three Charts, Louis clearly shows why you should ignore the short-term swings and remain a long term buy-and-hold investor. A must read post!

Buy and Hold vs Sell in May

Buy and Hold vs Sell in May. courtesy of www.wallstreetdaily.com

Speaking of buy-and-hold, there’s buy-and-hold, and then there is really buy-and-hold! So what does long term investing really mean to you – 10 years or more? Time is irrelevant to Dividend Growth Investor, and he explains why he would not sell a dividend stock ever after a 1000% gain.

Dividend Mantra is bullish on dividend stocks no matter what the market is doing. Mantra discusses current difficulties in allocating capital, but also discusses the difficulty with paying a premium for top-notch companies.

Dan Mac at Dividend Growth Investing thinks many dividend stocks are actually overvalued, based on the Price-to-Earnings ratio. Dan discusses 20 stocks you should not be buying right now.

Over at A Wealth of Common Sense, Ben thoroughly discusses the lost decade and How to Invest 100% of Your Portfolio in the Stock Market.  But what if you had only invested in big blue-chip dividend paying stocks?  Was there a lost decade? Read Ben’s post and find out.

Over at My Own Advisor, Mark asks the question Is Coca-Cola the perfect dividend paying stock? Well, not much to say here – I think it is. Again, who cares what the stock market does, buy KO and enjoy the dividends. ;)

The Passive Income Earner discussed International Allocation through Conglomerates.

The Dividend Guy (aka Mike) is bored of utilities and banks! So he’s written a couple of stellar posts on the toy companies this week. Check out his super-detailed dividend stock analyses on Hasbro and Mattel. Awesome!

Have a nice weekend everyone! :)

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Dividend Ninja

The Dividend Ninja is a DIY (Do It Yourself) investor, who started blogging in 2010 about his journey into dividend stocks. After investing in mutual funds for years, and working with a second advisor in 2009, he realized it all came down to fees and commissions. Like most people, the market crash of 2008 and 2009 changed his views about investing and the financial industry.

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11 Responses to "The Weekly Lineup: Dividend Stocks Overpriced Edition?"

  1. Thanks for putting me in your roundup! Coke is it! Let the good times and dividends roll!

    Enjoy your weekend!
    Mark

  2. Dan Mac says:

    Thanks for including me! Seems everyone is wondering when the next market correction will be.

  3. Ben says:

    I found another solid dividend stat for you this week:

    From 1900 to 2010, the U.S. stock market returned 9.4% per year with reinvested dividends; without dividends reinvested it returned 5.0%.

    I think there will be many very frustrated investors out there if you are right and there is no near-term correction. It’s funny that not many investors would consider a melt-up in the market a risk, but that’s the case if you’re sitting in cash with long-term money.

  4. Ninja,

    Thanks so much for including me in your roundup!

    I’m definitely bullish on high quality companies going forward. I’m sitting on a little cash right now and it’s frustrating to not have any particularly compelling opportunities to use it on. I like a few names even at these elevated broader market levels, so we’ll see. I noticed the Canadian banks haven’t been enjoying the rally, so those could be potential opportunities.

    Hope you have a wonderful weekend!

    Best wishes.

  5. Thank you for the mention DN. At this stage of the market, investors might need to start buying stocks that are different than the ones they previously owned. I bought some AMP, and the big 5 Canadian banks this year. Unfortunately, the Coca-Cola’s of the world do not make sense to be bought. But they make a lot of sense to be held on – I am holding on for a 1000% gain there ;-) ( albeit in 2 – 3 decades)

  6. thx for the mention Avrom :-)

    Since most dividend stocks are still trading under 20 P/E ratio, I don’t fear for a dividend bubble… yet :-)

    dividend stocks have become the new bonds!

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