I bet that Wednesday's rally was simply a reflexive bounce, and that we could have more pain to come, and judging by Friday's action it looks like that is the case.
That is not to say it is my philosophy to bail out of the market whenever it catches a cold, but some smart adjustments are in order. First, you may have noticed my caution a couple weeks ago. Wednesday I used the lukewarm rally to take a short position in SDS which is an ETF that is 2X short the S&P 500.
It certainly won't eliminate portfolio losses in the event of a major correction, but it will certainly make sleeping at night easier while I am waiting it out. Ideally this will provide a nice pile of cash to buy cheaper stocks when the dust clears.
See my last few posts for the companies on the radar as buy candidates. Also, I like Eaton Vance Tax Advantaged Global Dividend Opportunities Fund (ETO). Although ETFs are not better than proper stock selection, this fund has a low turnover rate, and its selection of holdings are complimentary rather than redundant to my individual stock holdings. It currently yields around 6.2% and has growing dividends.
Oh, also Bank of Montreal just increased their dividend by over 22%.
Not a 'dividend capture' strategy, but a conservative long term approach to accumulating wealth by selection of investments with rising dividends. DISCLAIMER: The information herein is not investment advice, and is solely the opinion of the blogger. This blogger takes no pity upon the fool who acts solely upon this information without performing due diligence. An Internet blog should never be the basis for making investment decisions.
About Me
- Lewis P. Cornell
- An investor since the mid 1980s, who studied investment management for his business degree. Genealogist and compiler of "Cornell and Allied Families of the Southern United States"
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