Last week, we witnessed the greatest fall on the Street since 9/11, which started as a reaction to China's sell-off. Market's hard fall has led to massive selling which is a result of panic attack among investors. DOW is down by more than 500 points and NASDAQ has fallen more than 100 points. European and Asian markets haven't escaped this fall either.
This global market downturn has stressed one question always lingering over any investor's mind - is it just a correction or beginning of a recession? I believe the worst is not over yet and the market should bottom soon. This creates some buying opportunities for investors in the near future.
So, let’s go bargain shopping.
There is consensus among the Street analysts and economists that the US economy is slowing and will continue to grow at a moderate pace (slower than 2006). Also, there is a growing concern regarding the state of subprime lending market and with inflation still above the comfort zone of Federal Reserve, rate cuts are yet not in the picture. I believe it is time to play defense, which means that investors should look into buying good dividend yielding undervalued stocks.
My number one pick is Altria Inc. (MO). I like the smoke king because it pays a good dividend (yield = 4.1%) and has a strong balance sheet. Also, beta (a volatility measure in relation to the entire market) for Altria Inc. is low. For more information please read my previous post on MO.
http://happyinvestingposts.blogspot.com/2007/01/smokin-altria_10.html.
In such a turbulent time, I think investors should invest in defensive stocks such as PepsiCo Inc. (PEP). I like Pepsi because no matter where the global economy is headed, general population will continue to consume food items and drink soda. Also, the outlook for international markets still remains positive and this is good news for the food and beverage multinational.
I also like Exxon Mobile Corp. (XOM). XOM is down 9 points from its one year high and is undervalued. Exxon Mobile should continue to benefit from high demand for oil and increasing oil prices. One positive indication for Exxon Mobile is that the management is buying back its stock right here right now, which means that it believes in its future. Another thing worth mentioning is the fact that all big institutions have always loved the oil giant. Exxon Mobile Corp. is one of the most held stocks in mutual funds and as long as the mutual funds like it, XOM is going higher.
Bottom line, when the market is hard on you, play defense. In my opinion, all three MO, PEP and XOM are BUYs.
This global market downturn has stressed one question always lingering over any investor's mind - is it just a correction or beginning of a recession? I believe the worst is not over yet and the market should bottom soon. This creates some buying opportunities for investors in the near future.
So, let’s go bargain shopping.
There is consensus among the Street analysts and economists that the US economy is slowing and will continue to grow at a moderate pace (slower than 2006). Also, there is a growing concern regarding the state of subprime lending market and with inflation still above the comfort zone of Federal Reserve, rate cuts are yet not in the picture. I believe it is time to play defense, which means that investors should look into buying good dividend yielding undervalued stocks.
My number one pick is Altria Inc. (MO). I like the smoke king because it pays a good dividend (yield = 4.1%) and has a strong balance sheet. Also, beta (a volatility measure in relation to the entire market) for Altria Inc. is low. For more information please read my previous post on MO.
http://happyinvestingposts.blogspot.com/2007/01/smokin-altria_10.html.
In such a turbulent time, I think investors should invest in defensive stocks such as PepsiCo Inc. (PEP). I like Pepsi because no matter where the global economy is headed, general population will continue to consume food items and drink soda. Also, the outlook for international markets still remains positive and this is good news for the food and beverage multinational.
I also like Exxon Mobile Corp. (XOM). XOM is down 9 points from its one year high and is undervalued. Exxon Mobile should continue to benefit from high demand for oil and increasing oil prices. One positive indication for Exxon Mobile is that the management is buying back its stock right here right now, which means that it believes in its future. Another thing worth mentioning is the fact that all big institutions have always loved the oil giant. Exxon Mobile Corp. is one of the most held stocks in mutual funds and as long as the mutual funds like it, XOM is going higher.
Bottom line, when the market is hard on you, play defense. In my opinion, all three MO, PEP and XOM are BUYs.
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