November 18, 2011

Happy Friday!!

Rough week in the market but stick in there investors!!

My current portfolio stands as is:

Conoco Phillips (COP)- 6 shares [Yield=3.0%]

Pepsico (PEP)- 6 shares [Yield=3.2%]

General Dynamics (GD)- 5 shares [Yield=3.0%]

Annaly Capital Management (NLY)- 35 shares [Yield=14.9%]

Frontier Communications (FTR)- 50 shares [Yield=14.2%]

While I took some risks with frontier, I believe that the dividend cut that will occur in the future is already accounted for, and i bought it at $5.26 and currently it is at $5.30 so i have not lost anything. The important part of this portfolio is the diversification of sectors that spread your risk out so if one sector gets hit hard your not freaking out asking why Mr. Stock Market has taken his revenge out on you!! Conoco Phillips is an energy stock, Pepsi is a consumer defensive, General Dynamics is an aerospace and defense contractor, Annaly is a Mortgage REIT, and Frontier Communications is a telecom stock. Diversification like that will spread the risk out and make you exposed to all possible profits, and if nothing else you have good dividend yield to sit on until the market calms down.

Stocks to watch for:

Ford (F)- Dividend yield in the future? Ford has great cash flow and a P/E of 6.2 going forward. This stock has gotten beat up and its hard to see that this stock stays down for long.  Keep a close eye on it and look for it to pop starting next year as the economy starts to pick up.

The Walt Disney Company (Dis)- You may be asking why with the 1.1% dividend yield, but this entertainment powerhouse is a gem in terms of a cash cow that is a safe investment for a defensive investor. With a majority stake in ESPN, History Channel, and ABC channel stations, Disney has a broad market in which to defend against a volatile market. Look for Disney to be a safe investment, and increase its dividend as its treasure trove of cash continues to build.

Clorox (CLX)- This is a recession proof stock that takes pride in the fact that it has a product in about every home in America. From bleach to window cleaning supplies, Clorox is a defensive investors best friend in the fact that it has an unlimited amount of customers who will always need its product. Also, with a 3.6% yield, you have nothing to lose as it is trading at a good value with a good yield. Looks like this stock is for those who want to hold and make profits while waiting for the market to smooth out.

Till tomorrow!! Cheers