Despite fears of the contrary, there is way for wary investors to remain in the market despite mounting political, economic and global fears, Barron’s explained.
“November and December are two of the best months for the stock market, historically speaking. Professional money managers, however, are the most bearish they have been in the past 20 years, according to the latest Barron’s Big Money Poll,” the report said.
Savvy investors will take the current opportunity to “add some high- quality, beaten-up stocks that offer attractive dividend yields,” Barron’s said.
Barron’s suggested five companies that fit the bill.
- UnitedHeath (UNH)
- Ingredion (INGR)
- Eli Lilly (LLY)
- Kohl’s (KSS)
- Ralph Lauren (RL)
“Each of the quintet earns its dividend—providing a measure of safety—trades at a discount to historical averages, and reported higher profits than expected when it most recently disclosed its earnings,” Barron’s said.
“Investors worried about macroeconomic conditions may sleep better at night, holding cheap stocks and secure dividends,” Barron’s said.
To be sure, investing guru and one-time "bond king" Bill Gross is warning investors to beware of slow growth and sluggish markets.
To survive such a treacherous investing environment, he recommends dividend-paying stocks over negative-yielding debt.
In his first investment outlook since retiring in March, Gross said on Tuesday that with trillions of dollars in debt offering negative yields, investors should be holding stocks that promise secure dividend payouts, the Financial Times explained.
“In the absence of substantial fiscal stimulation, the economic and asset boost from negative interest rate yields may have reached an end,” he said in a commentary on his website.
“Prepare for slow economic growth globally and an end to double-digit market price gains of months and years past. High yielding, secure-dividend stocks are what an astute investor should begin to own,” he said.
Gross said further upside in equity markets is limited, because central bankers were “becoming wise to the negative effects of rates at zero (or less) that literally rob small savers and larger financial institutions such as banks, insurance companies and pension funds of their ability to earn historically ‘guaranteed’ carry,” he wrote.
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