Rotten markets tend to purge themselves through wars and disasters.. Thus, the two world wars were followed by periods of strong growth. Closer to home, the American invasion of Iraq following September 11 put the markets back on track following the bursting of the Internet bubble. In the space of a few weeks we have just experienced the Arab revolutions followed by the overthrow of certain dictators, an earthquake of monstrous magnitude followed by a catastrophic tsunami and a very serious nuclear threat, and finally the very recent decision of the UN to intervene in Libya.
These events have of course not been without effect on the world stock markets and on the currency markets. Shares, the dollar and the euro have plummeted, the Swiss franc is playing its role as a safe haven more than ever, to our great misfortune. With such speculation on the CHF, it is simply impossible to achieve decent results when using the Swiss franc as a reference currency. Our performance has also sunk, just like that of the market.
Small positive point, with the euro as a reference currency, we manage to maintain a profitability higher than the market. However, the Sharpe ratio returns to the negative zone, the profitability of the portfolio being lower than a risk-free investment, like that of the market, moreover. Another subject of consolation, With dividend season in full swing, we have already exceeded our net income from the previous quarter, malgré la baisse du dollar. Ceci est dû bien entendu à notre achat de Coca-Cola en février, mais aussi à la croissance des dividendes de nos différentes positions.
Rappelons que notre objectif premier est d'obtenir des revenus croissants sur le long terme, dans le but d'atteindre une indépendance financière, de financer une mise à son propre compte, une retirement partielle ou totale. Les revenus sont donc plus importants que la fluctuation des cours. En allant plus loin, on peut même dire que cette baisse du marché des actions, et dans une certaine mesure du dollar, peut nous permettre d'buy future income cheaper.
We were talking in a previous article that the market was overvalued. We note that the recent fall in prices has not significantly changed this situation, since the market capitalization ratio compared to US GNP has only fallen by 0.1 point since January 22. The correction must of course be made over a longer period for the impact to be significant. Our algorithm has also not reported no noticeable signal change in our portfolio (apart from the arrival of a new kid).
Despite this, there are still many quality stocks that historically trade at very attractive valuations from an earnings and dividend perspective. Consider, for example, JNJ, WMT, KO and many more from our portfolio. It is therefore time to take advantage of this period of doubts which is setting in to seize these opportunities and look for new ones.
Perhaps symbolically linked to the title of this article, but above all because the company has financial qualities that are dear to us, we have thus added General Dynamics to our portfolio. Le titre n'est actuellement pas une opportunité d'achat, à cause notamment d'un rendement assez faible et d'une volatility plutôt élevée. Néanmoins, le payout ratio et la croissance des distributions sont assez remarquables. C'est donc un titre que nous allons suivre dans le futur.
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