Gerry Sullivan's  Instablog

You read Seeking Alpha and you are involved with the market every day.  You know what is going on and you are skeptical about the market here with the SPX at 1005.  So am I, but that is really irrelevant.  I want you to think about another group of investors.

These investors have these common traits:
1) They are underinvested in equities.
2) They see the economy improving both in the statistics they read and from what they see every day.
3) Their credit balances in brokerage accounts, bank savings accounts, short term CDs, money market funds, just aren't earning a satisfactory yield.

These investors are nibbling on stocks.  They are causing the market to go up when you think it should be going down.

Now, I am going way back in time and putting on my broker hat.  I am going to present an idea to a client who has money in the money market fund earning 0.10%.  I am going to suggest that he buy stocks with that money.  Solid companies that he knows and companies that pay good dividends. 

You can make up your own list, but I am going to recommend:
Chevron (CVX) 4% yield;
Johnson and Johnson (JNJ) 3.2% yield:
Procter and Gamble (PG) 3.3% yield:
Coca Cola (KO) 3.3% yield;
Pennsylvania Power & Light (PPL) 4.7% yield:
Microsoft (MSFT) 2.2% yield;
Deere (DE) 2.5% yield;
AT&T (T) 6.4% yield.

You don't need my list, you can make your own, but these are all well known companies with good dividends.

You might note that I am purposely avoiding financials and raw materials companies.  They have made big moves off the March lows.  This investor is looking to pick up laggards with good yields. 

If this is what he is going to buy, this is what you should buy.  Well known, solid companies with long term track records and good dividends.

Disclosure: long CVX, JNJ, PG, KO,T, and 84 other stocks/ETFs.