The stock market may be blooming again with the major key stock indices rallying back above their 50-day moving average (MA), but there is still ample downside vulnerability.
We have the mess in the eurozone with Greece threatening to leave the euro and not honor its massive debt obligations. There’s also the China risk. Then there are the oil prices. Oil rallied to $53.00 last week, prior to retrenching and then rallying again. It’s going to be nerve-racking.
The problem investors continue to face is the lack of alternatives to the stock market. The 10-year bond yields 1.82%, which is not great unless you have tons of cash. Of course, you could buy distressed high-yielding Greek or Russian debt, but why would you, given the default risk?
So that leaves us with stocks.
Stocks to Watch While Bonds and Global Economy Stagnate
For those of you looking for and requiring dividends, it’s not easy at this time. There are the big banks and higher-risk regional banks to consider. For this reason, I would be sticking with the more stable dividend-paying stocks that not only pay dividends, but also offer the opportunity for capital gains.
The most obvious target for dividends is the blue-chip area. These are great companies with proven long-term sustainability for investors seeking dividends and growth. We are talking about world-class multinational companies, such as The Boeing Company (NYSE/BA), General Electric Company (NYSE/GE), Johnson & Johnson (NYSE/JNJ), The Coca-Cola Company (NYSE/KO), McDonalds Corporation (NYSE/MCD), The Procter & Gamble Company (NYSE/PG), and Wal-Mart Stores Inc. (NYSE/WMT). For the most part, you cannot go wrong with blue-chip dividend stocks…. Read More
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