Tags: Shelter | Shares | Bunker | Mentality

'Shelter Shares' Rise as Investors Embrace Bunker Mentality

Wednesday, 01 Sep 2010 10:01 AM

Building Bunker Hill is back in style.

“Shelter shares” — those investments in what people actually need as opposed to what they think they need and want — are increasing in number  to the extent that a portfolio of 18 shelter-providing companies that peaked in the past month would be up about 24 percent this year over the broader market’s 4.5 percent decline.

"If it's the end of the world, what do you buy?” Keith Springer, president of Capital Financial Advisory Services, asked The Wall Street Journal. “Canned foods, guns and the generators."

“There are a huge number of people who feel this is the end of the world."

Indeed, a comparatively small number of equities have seen share prices rise to record highs recently — and most of them are in companies that provide consumers with essentials that would prove indispensable, such as canned goods, bottled water and auxiliary generators, in an Armageddon-type event.

Many of the star performers are steady dividend stocks, including Cummins, Dr Pepper Snapple and Airgas. At least half of these companies have increased their dividend payouts this year.

The dividend yield on the Dow Jones Industrial Average is 2.81 percent, compared with. 2.48 percent on 10-year Treasuries, Bloomberg Businessweek reports.

The dividend yield of 2.13 percent on the S&P 500-stock index, a broader market gauge, remains below the 10-year Treasury yield but the gap is narrowing. The yield differential is currently at 44 basis points (one basis point is equivalent to 0.01 percent, or one-hundredth of a percentage point)  versus an average of 107 basis points in June and 202 basis points in April.

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Building Bunker Hill is back in style. Shelter shares those investments in what people actually need as opposed to what they think they need and want are increasing in number to the extent that a portfolio of 18 shelter-providing companies that peaked in the past...
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2010-01-01
 

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