It's not about Facebook (FB), it's about the bear market we are experiencing. Investors don't trust the markets -- that's why Facebook is not trading around $50 like pundits thought it would trade. Despite an atmosphere of exuberant optimism, we are seeing hints of a market collapse in the Western world.
There is evidence of a bank run in progress in Greece as $894 million was withdrawn from banks in the country in one day. This could easily be a precursor to bank runs in Spain, Portugal, Ireland, and Italy within the next 12 to 36 months as the debt crisis in Europe continues to spread.
Francois Hollande has been sworn in as the new president of France after an election on May 6, 2012, in which Nicolas Sarkozy was thrown out of office by angry voters. Despite talks between Hollande and German Chancellor Angela Merkel in the aftermath of the election aimed at keeping the EU together, Hollande ran on a platform of spending to stimulate economic growth. With the social mood poised to go south in the coming months and years there will be strife and discord between Hollande and Merkel, much like the strife and discord that has been unfolding between President Obama and House Speaker John Boehner. The results will be the same -- large-scale political gridlock -- effectively shutting down any attempt to fight the economic cataclysm that is unfolding.
The United States is dealing with its own version of the PIIGS -- namely Illinois, California, Texas, New Jersey, and Florida. California's budget deficit problems have been making the news again, with the deficit expanding to $16 billion and even more budget cuts on the horizon. Keep in mind that California is over three times the size of Greece, so the implications of California going under would certainly result in a deflationary vortex that will drag down the rest of the U.S. within a matter of months, if not weeks.
Even Northern European countries are facing political and social problems that could lead to even more economic slowdown.
It is uncertain world with an even more uncertain economic climate. This is true not only in the Western world, but also emerging markets can't continue their growth path. Protecting your assets is a must, so you can choose to invest in high-dividend stocks as downside protection. Whenever income represents a large element of the expected total return, the time to get back an initial investment is shorter than waiting for capital growth. Dividend stocks can generate income, grow income, and offer the potential of capital appreciation.
Four U.S. stocks that offer great yields and are currently on the buy list are as follows:
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