At the time I write this article, France has elected a Socialist and all the indexes are showing a sharply lower open for our markets come Monday morning. I believe this could be the capitulation that we have been waiting for to deploy our cash reserves.
Our "Team Alpha" portfolio consists of ExxonMobil (XOM), Johnson and Johnson (JNJ), AT&T (T), General Electric (GE), Annaly Capital (NLY), Southern Company (SO), Procter & Gamble (PG), Philip Morris (PM), Intel (INTC), Realty Income (O), Chevron (CVX), E.I. du Pont (DD), Duke Energy (DUK), Coca-Cola (KO), and Bank of America (BAC).
We currently have roughly $20,000 in cash reserves to deploy at some point Monday if the stocks we hold take a dip. Specifically, I would look to add to the following core positions:
- ExxonMobil
The dollar could rise and so will commodities, with big oil potentially leading the way. Take advantage of any weakness in ExxonMobil to add more shares to this monster blue chip.
- AT&T
Remember that there are numerous positives about AT&T which I have outlined in previous articles. With a 5.3% dividend yield right now, any further weakness should be taken advantage of to add zip to our dividend income stream.
- General Electric
This conglomerate has its tentacles everywhere and with the background noise that could occur because of Europe, GE stands to take a dip to the point where we can add to our position. Taking advantage not only of the 3.6% yield, but for a recovery of share price as the noise settles down.
- Coca Cola
Take advantage of any price dip as the flight to safety will include consumer staples. With Coca Cola's yield and sector, we might be able to add to our position here as well.
Overall Market
The stocks I have suggested to add shares to our existing holdings are important to fortify our overall retirement strategy. I would also keep an eye out for some new positions to open up that might be hit harder than others.
When an overall market selloff occurs, prices will drop for absolutely no other reason than people selling due to panic and fear. Let that be other people, not us. We buy the dips, and add to our core.
Nobody ever made any money by selling because of panic. We should always remind ourselves that when everyone else is selling, we want to be buying the best stocks we can. Just as we are urged to buy a car with a sale price, or a pair of shoes, or even a new couch. If the "sale" makes sense, then we want to buy some stocks.
My Opinion
With the background noise taking center stage once again with our favorite "soap opera", Europe, a drop in prices could be sharp and short, or sharp then flat for awhile-- we just do not know. What we do know is that earnings have come in looking quite good, we are doing very well with our core portfolio, and nothing has fundamentally changed in any of our core positions.
The only thing that could change is the share prices.
Disclosure: I am long XOM, JNJ, GE, T, NLY, O, KO, PM, INTC, BAC, SO, PG.
Disclaimer: Please be sure to do your own research prior to making any investment decisions. This article is not a recommendation to buy or sell any security and is strictly the author's opinion.
