It seems wherever I look on the investing scene, bloggers and investors are viewing stocks as being overpriced. They seem to be having a hard time finding value in the current market. Certainly the big blue-chip dividend payers such as P&G, Coca-Cola, and Wal-Mart are expensive. That’s not a surprise when you consider the DOW and S&P 500 are hitting all-time highs. Scary!
REITs and Resources
I think most dividend investors are looking in the wrong spot for value, and not considering other opportunities. REITs (Real Estate Investment Trusts) and resource stocks are on sale right now. These asset classes are cheap, they’ve suffered significant declines, and nobody wants to touch them with a ten-foot pole. Obviously they are cheap for a reason, and there may indeed be future declines. But I think there is opportunity here, and I have some posts planned for the future to take a deeper look. The rebound in these two sectors may have already started.
Ben Carlson’s post Are REITs a Buy did very well last week, with not one but two Globe & Mail mentions. So a big thanks to Rob Carrick!
Globe and Mail reporter John Heinzl also thinks REITs are a bargain right now, and he wrote about that in The Right Time to Buy REITs?
The Weekly Lineup
Here are some other great reads from around the web:
First off The Dividend Guy (aka Mike) is launching a big dividend project for DIY (do it yourself) investors this fall. He wants to make investing in dividend stocks easy for people to understand! You can get on his mailing list to keep current on the launch of his new project.
Dividend Mantra discussed in-depth his recent sale of Intel Corp., a company he was bullish on just last year. I’ve always felt Intel is a problematic investment, and that the yield is likely too high for the company to sustain. In light of current technology trends, and Intel’s position in the market, I think Mantra made a wise decision to sell. (I’ll also have a post on Intel soon).
GoBankingRates had a fun post with Billionaire Budget, a look at Warren Buffett’s frugal life-style and the importance of simplicity and frugality.
I like pretty well anything that Dividend Growth Investor writes. In this post DGI reflects on the strategy of long-term dividend growth investing.
When it comes to bonds you are either for or against them. Read Mark’s post on why he’s moved from holding a portion of bonds in his portfolio to a 100% dividend stock and equity ETF portfolio. One point Mark brings up of course, is that he has a defined benefit pension plan from work. In part many experts view this as having a “big-bond”, hence why he is comfortable taking on more equities.
While some investors could handle a 40% or 50% drop in their portfolio, I doubt most investors could. Read the Canadian Couch Potato post on why now is exactly the wrong time to sell your bonds. This is even more prudent advice considering the dizzying heights of global stock markets. Anyone remember 2006 to 2008 when equities were soaring, and investors were dumping their bonds?
If you live in Victoria, Nanaimo or Vancouver you’ll want to take advantage of this opportunity! Canadian Money Saver contributor Donald Dony is offering a series of investing courses for beginners. You can get more info from his Calendar of Events page. Donald has decades of experience with technical analysis and understanding markets. So you’ll gain a lot of good info by attending.
Have a nice weekend everyone!