Chances are, you never considered Aesop’s fable, “The Tortoise and the Hare,” as applicable to investing.
But in this economic climate, it is!
Income and dividend analyst, Mike Larson, editor of Safe Money Report, says investors who gravitate toward “steady-eddies” — durable, “safe money” stocks and sectors — are the investors who will “win out” in the long run.
According to Mike:
Sometimes all the attention goes to the high-flying, red-hot, no-dividend, flash-in-the-pan kind of stocks — your “AMC’s” of the world — and that gets so much attention because it might seem exciting. But, the problem is, those things tend to soar very high and then crash and burn.
It’s when you’re focused on consumer staples, as well as long-term upward trends, Mike says, that you can generate consistent income in an environment where inflation is surging.
That’s why you have utilities hitting multi-month, and in some cases, all-time highs. That’s why you have some of the specialized REITs (real estate Investment trusts) hitting multi-month, or all-time highs. Those are the kinds of sectors you want to stick with. It’s kind of the tortoise approach versus the hare.
In this special four-minute video segment, Mike describes how income investors can successfully ride out the rest of the year, and why certain market forces aren’t disappearing anytime soon.
Mike explains:
We had some really unsustainable run-ups in housing prices, in even auto prices — which is unheard of for autos to be an appreciating asset instead of depreciating — and I think we just kind of hit a wall where housing became unaffordable, cars were unaffordable, and wages and salaries weren’t keeping up.
The U.S. Fed is going to have a hard time getting out of these zero-level interest rates. Europe has been stuck in that environment for years and years. It’s very hard to get out of that.
What it means for an income investor is that the yield you’re going to be able to get from buying bonds, from buying some dividend-buying stocks, is going to be pretty lousy.
So, you need to go out there and find better stocks, better ETFs (exchange-traded funds) and you need to look at alternative investing strategies that allow you to pull income out of the market, to boost the yield your portfolio is spinning off.
If you focus on safe money companies, little by little, you’re piling up gains from the dividend checks you’re receiving from dividend deposits. You’re piling up gains from the gradual, more sustainable rally in the price of these names. They yield much better than the S&P 500.
In this insightful video, Mike discusses:
• An ETF that has “a lot of liquidity” and “is easy to trade in and out of.”
• A company “with a solid yield and solid history of performance” that will go even higher with government spending initiatives.
• How selling options is a smart strategy to boost income.
• His newsletter, Weekend Windfalls, where the mission is to generate $1,000 each week.
And more!
The information in this short segment couldn’t be timelier. I suggest you watch it now.
Happy investing!
Jessica Borg
Financial News Anchor
Weiss Ratngs
