Market Playground

By Chris Santiago

The past month has been a noisy time period for equity markets, with many sharp up or down days for the major indexes. Investors have been hanging on the headlines – mostly centered around Greece and other Euro economies, most recently Italy.

During market turbulence such as we are experiencing now I am happy to tune out the day-to-day noise, and focus on our long-term investment strategy. For the Dividend Value model, that means focusing on opportunities to buy companies at attractive prices with above-average and growing dividend yields. This conservative approach helps eliminate the temptation to trade on the news and prevents us from developing tunnel vision on the daily headlines.

As I mentioned last month, we have been looking to initiate a position in 3M Company (NYSE:MMM) when both the price, and consequently the yield, became attractive. In the beginning of the October an opportunity to buy the stock presented itself at around $72, but I hesitated and the stock has since moved back into the $78-82 range. We will be patient and wait for the right time to step in.

Another company that has popped up on the radar is B&G Foods (NYSE:BGS). B&G Foods owns many brands and produces a multitude of food products. The company just reported a great quarter of strong sales and net income growth, and also announced in 9.5% increase in the quarterly dividend. Currently yielding around 4%, the stock has been on a tear during the last month; we’d love to start a position in this company but are looking for the stock to pull back a little before we do.

The Dividend Value portfolio is still outperforming the S&P 500 since inception and I believe the conservative, patient strategy has played a major role thus far.  It’s anyone’s guess what the next headline will be and how the market will react.  But I believe our focus on dividend-paying stocks will continue to guide us through the rough times ahead.  We will anxiously await our future buying opportunities.

The above article comes from Covestor. For more information on Chris Santiago, and to view his Dividend Value Covestor Model, visit Covestor.com. 

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