Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

There’s Only One Group of Stocks a Sane Investor Would Buy Now

Companies / Investing 2019 Aug 29, 2019 - 09:55 AM GMT

By: Robert_Ross

Companies

Fear of missing out is a dangerous drug.

And right now, it’s luring investors in.

Investors know US stocks have gone up nearly 200% over the past decade—and are now near all-time highs. They know this is the longest bull market in US history.

At the same time, they’re watching other people make money and thinking, “I need to get in on this.”

Problem is, investors are piling into a very expensive—and risky—market.

That includes $14.4 billion during a single week in June. It was the largest inflow of money in nearly two years.

Unfortunately, history shows a lot of these people are setting themselves up to buy high and sell low.

I’ll share some exceptions in a bit.


But before that, let’s look back on the time just before the dot-com crash to see how dangerous today’s setup really is.

The Same Thing Happened Right Before the Dot-Com Bubble Burst

We’ve seen this movie before.

Back in 1999, during the dot-com bubble, the NASDAQ technology index was up 85% for the year. It was one of the largest single-year returns for any major stock market index ever.

At that point, investors should have been extra cautious. But people being people, they kept gobbling up stocks.

Before 2000, the record for monthly net inflows (money going in minus money going out) for US stocks was $29 billion.

But in January 2000, after the NASDAQ’s 85% run up, investors pushed another $44.5 billion into stocks. And they didn’t stop there.

In February, another $55.6 billion. And in March, another $40 billion.

No one wanted to miss out… that is, until the dot-com bubble burst on March 24, 2000.

By September 2001, the NASDAQ had lost 74% of its value.



A lot of people lost a lot of money. Especially those who bought in late when stocks were already expensive.

Unfortunately, many investors are setting themselves up to make the same mistake today.

Nothing Goes Up Forever

Remember, this is the longest bull market in US history. This party won’t go on forever.

That sounds like common sense. Yet people are still piling into stocks.

My research suggests that stocks will peak in mid-2020. The important thing to know, though, is that eventually stocks will fall. We got a taste of this recently when the Dow Jones Industrial Average fell 800 points in a single day.

When the big drop comes, you don’t want to be one of those people who bought high and sold low.

That said, not all stocks are off limits…

The Unicorn of the Investing World

Many safe and reliable dividend-paying stocks are still good buys right now.

Just look at the Dividend Aristocrats, the top tier of dividend-paying stocks. These are companies that have increased their dividends for more than 25 years in a row.

You need a resilient business in order to do that… a business that can prosper during good and bad times.

Since 1990, Dividend Aristocrats have returned 11.6% on average, according to Bank of America Merrill Lynch. That’s compared to 9.3% for the S&P 500.

Even better, Dividend Aristocrats have produced these higher returns with less volatility than the S&P 500.

Three Dividend Aristocrats to Buy Right Now

Stocks that offer higher returns with less risk are a bit of an anomaly. This is especially true now, with the stock market near all-time highs.

That’s one of the reasons I focus on dividend investing. It’s the safest and most reliable long-term strategy for investors.

And right now, these three Dividend Aristocrats are well worth buying.

First up is Walmart (WMT), one of my favorite dividend payers. Walmart is the largest US retailer. It also has a growing e-commerce segment that’s starting to nip at Amazon’s heels.

Walmart has increased its dividend for 31 years straight. So it has one of the safest dividends out there.

Next on my list is AT&T Corp. (T), the second-largest wireless carrier in the US.

AT&T was also the first provider to start rolling out 5G technology. The company expects to complete its 5G nationwide network next year.

Meanwhile, AT&T has a 5.9% dividend yield. That’s nearly three-times the yield on the S&P 500. And, since the company has increased its dividend every year for over three decades, the payout is safe.

Our final Dividend Aristocrat is Coca-Cola (KO). KO is the largest nonalcoholic beverage company on the planet.

The company has a dividend yield of 3.0%, and it’s increased its dividend for 57 years in a row.

I expect late comers to keep buying up stocks while this bull market rages on. But if history is any guide, you want to be extremely cautious about what you buy right now.

Certain companies—like the three safe and reliable dividend-payers I just told you about—are much better positioned to weather the downturn that’s inevitably coming.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in