What to invest in today?

[Harmony Management]

I don't think like some that the markets are very overvalued today even if I prefer the valuations of 2008-2011. Fortunately, thanks to my experience, I invested heavily at that time otherwise I would be biting my fingers today. We are all hoping for a good little bear market. But what are you doing today? Even if opportunities arise regularly, they will not be very numerous if we are in 2 to 3 years 20 to 30% higher than today. I am nostalgic for the good old days not so long ago when sales on magnificent companies were so numerous. What to do? Wait, the opportunity may never present itself again, it was the opportunity of a generation? Personally, I invested in Caterpillar today. What would you do if you had a large sum to invest in the stock market today for the very long term? My choices would be the following in the absence of better valuations: WMT PG MCD PM UNA KO IBM Even if I would like much lower prices. I am really afraid of not investing today and finding myself in a few years with much higher prices. What is your opinion?

[Harmony Management]

Just writing these few lines has allowed me to make a decision. My portfolio is quite well stocked for my taste, being in the middle of an active life with a good savings capacity, I would like, like all of you, lower valuations. Despite my little experience, I would really have a hard time advising someone who would like to build a portfolio today in stocks with growing dividends. Personally, I have my non-exhaustive but very specific list of companies to watch. In the months and years to come, I hope that opportunities will arise but will only invest in prices below 15 to 20% lower than today's. If the opportunity unfortunately never arises, I will invest my savings elsewhere than in the stock market hoping for better days (I mean worse days). What do you think?

[Harmony Management]

I hope my previous messages will make many of you react because I ask myself a lot of questions today. I hope I am not the only one. Remember! PG 45$ WMT 49$ KO 20$ JNJ 47$ in 2009!!! I want to cry…

[Pat Jac]

We all ask ourselves the same questions... In my case, I have a large sum to invest (500,000 CHF) and I admit that I am a little paralyzed. I read, I consult. Everything and its opposite. Doing nothing and keeping cash means many dividends lost, but also a lot of taxes to pay. Investing and receiving dividends with a drop in prices of 10 to 20% and it's back to square one for several years.

The answer to your question depends on your age, the duration of your investment and especially what you expect from it. Personally, I would have a hard time being happy if my shares fell by 50%. I think I will invest 50% of the sum, little by little by planning the purchases over a year, and keep the balance in case of a big storm on the markets. But it is for want of anything better…

[birdienumnum]

Make a "watch list" of stocks that you like and when the time comes for earnings announcements (between January and the end of March 2014), pull the trigger when one of the stocks on your list corrects sharply (say between -5% and -15% over 1 or 3 sessions)... as long as there is nothing bad in the results. Sometimes, the expectations of analysts and funds of all kinds are just too high, causing a correction. Nothing too bad, just an opportunity for those who know how to seize it.

 

[Pat Jac]

This is exactly what I plan to do, but the question remains: with a drop of only 5 to 15%, aren't we still buying too expensive, especially the beautiful US stocks with growing dividends...?

[Jerome]

It is clear that today the markets are too high, but most investors and bankers do not give a damn. It is a game of who will be the craziest, who will be the last in Russian roulette. Of course, we can still play like this for a while, as long as there are enough buyers and cash. And especially as long as the Fed distributes it.

There are some who are starting to fear that the US central bank will be a little less nice in the near future. On the other hand, I have the impression that the Fed has been accommodating for a good dozen years. So don't think that they're going to get excited overnight and put their rates at 8%. But since everything in the stock market is a question of perception and feelings, it would only take a great wise man from the Fed to go a little too crazy for the market to get carried away, believing that the central bank is changing policy.

In short, all this to tell you that in the short term we don't know much. The stock market, despite all its computers, is a reflection of man, unpredictable. All I know is that in the long term there will be new big thrashings. And yes, Harmonie Gestion, opportunities will present themselves. You just have to be patient. Quite the opposite of what most people do.

In the meantime, there is no need to be Manichean either. We can continue to buy, cautiously. We just have to do it less often and in a more targeted manner. And keep nice reserves for the next flood.

 

[guyem]

Hello everyone & best wishes ,,,

I just took a look at the ex us div strategy to put it in the list and just noticed that ZURN has gone from

5* to 3*,,, can Jerome tell me what caused this drop in the rating??

[Jerome]

Hi Guyem, all my best wishes to you too. This is mainly due to the fact that the dividend has had difficulty increasing since 2010. Three stars is still a good rating, in any case nothing to worry about if you have one. On the other hand, it is true that for the moment I would not really want to buy one. Nothing suggests that the dividend will increase much this spring, the payout ratio is certainly reasonable, but not very attractive either and the earnings per share have difficulty increasing. Moreover, analysts do not expect anything extraordinary for 2014 in terms of dividend and EPS. It is not that I listen to what they say, I don't even care, but in this case this time I agree with them.

[guyem]

Thank you for your reply , I took advantage of the last leg of the rise and cut the line about 2 weeks ago, approximately how often do you run your algorithm?

 

 

 

 

 

 

 

 

 

 

……

 

[Jerome]

It runs every Sunday. On the other hand, at the beginning of each year, there are quite a few things that get sorted out from a historical point of view and/or dividend growth rates and the phenomenon is all the more marked for Swiss/European dividends that only pay their distributions once a year. This is the reason why Zurich was downgraded by two levels.

[Author]

Posts