A dark week for defensives and the dollar

Abbott, a promise for life... Let us hold on to this slogan and project ourselves into a future of regular dividends, because for now you just have to be realistic and humble. We were bad on all counts last week, which adds to several other disappointing weeks and gives us a performance well below our expectations.

Of course, we should not focus on short-term performance, but at this rate we are also moving away from our long-term goals. The recurring problem of the weakness of the dollar now raises the question of a modification of our algorithm. Indeed, currently, the fundamental criteria related to dividends and volatility are clearly favorable to US stocks, and for good reason: they pay better, longer and more and more. That being said, it is all well and good to receive more and more dollars, but if they are worth less we do not move forward, or even go backwards...

On the other hand, you should be wary of making abrupt changes to your strategy after a few setbacks. Experience shows that this is the surest way to lose even more in the long run. One type of investment can underperform in one period, then shine in another. Currently, defensive stocks and the dollar are not celebrating, but they could be tomorrowChanging tack too easily can therefore also prove dangerous.

Let us also remember that, although important, the performance of our portfolio is in our eyes only a consequence of a good dividend investment policy. What matters first is income. that we regularly receive from these securities. From this point of view, we are still on a positive trend, despite the fall of the dollar.

We will therefore be thinking in the coming weeks about other ways of protecting our portfolio against the decline of the greenback. The upcoming planned introduction of Canadian securities, while positive for currency diversification, will not change the problem. Like European and Swiss titles, they do not hold up to comparison with US aristocrats.. Buying commodity-related stocks could be another option. Chevron (NYSE:CVX) or Sunoco (NYSE:SXL) have outperformed our best holding, Centurylink (NYSE:CTL), since we started monitoring them in our portfolio. Due to their high volatility, however, these securities have always remained very far from being in a "buy" position. Acquiring them would therefore mean de facto accepting higher volatility, which is precisely what we have been trying to avoid until now.

Finally, let us point out that a long-term approach means taking advantage of the good opportunities that the market offers. The weakness of the dollar can be seen as an opportunity to buy quality stocks at a knockdown price, provided of course that this weakness is not structural, which is far from obvious...