Retirement Strategy: Buy On Dips, Add To Core Holdings

Includes: GE, JNJ, NLY, T, XOM
by: Regarded Solutions

The market we are seeing is enough to send shivers down the spine of a porcupine. Especially retired ones.

It is no time for complacency however, in my opinion.

Doing nothing and standing pat is obviously a strategy. In my opinion, adding some shares at reduced prices is a better way to go for dividend seeking investors who are either retired or close to retiring.

Having The Right Mind Set

Before we set anything in motion we need to step away from fear and background noise. Then we can pick up a few bargains to add to our core portfolio of dividend paying blue chips. Squeeze a few extra points of yield as we consider that nothing has changed intrinsically with any of our stocks or the companies.

Some dollar cost averaging, as we re-balance our portfolios, is a proactive way to strengthen positions. Blue chip stocks that are now offering strong PPS values, increased yields, as well as solid balance sheets can be purchased at very attractive pricing right now.

If we have that mind set then we can take the following actions:

Stocks To Buy Now

1) Exxon Mobil (NYSE:XOM): Price as of this writing - $75/share, yield of 2.45%, ESS Rating - Bullish

Three key factors to consider:

  1. Oil is trading close to $100/barrel which should produce even greater income for XOM.
  2. XOM has a triple A debt rating. One of only four U.S. non-financial companies to have that rating.
  3. Eight consecutive years of dividend increases shows a great track record for income investors.

2) Johnson & Johnson (NYSE:JNJ): Price as of this writing - $62.25/share, yield of 3.64%, ESS Rating - Bullish

Three key factors to consider:

  1. Very consistent yield and five0year above average dividend increases.
  2. The very positive success of its new clot busting drug Xarelto for heart patients. This could be an enormous market.
  3. A very strong pipeline of new drugs and healthcare products that will only enhance the JNJ brand of its existing incredible product lineup.

3) AT&T (NYSE:T): Price as of this writing - $27.58/share, yield of 6.10%, ESS Rating - Very Bullish

Three key factors to consider:

  1. The growth that its product UVerse has shown in the last 12 months in relatively few markets. UVerse is taking market share from DirecTV (NYSE:DTV), Comcast (NYSE:CCS) and Cablevision (NYSE:CVC) in the areas that currently are being serviced. The bundling of services at very attractive prices are adding subscribers to video as well as Internet services, along with existing landline phone service. UVerse alone can add billions to the bottom line, in my opinion.
  2. AT&Ts consistently very high yield for a blue chip well capitalized Dow component. A wonderful income producer for those retired, as well as other income seeking investors.
  3. AT&T sells more iPhones and iPads than any other competitor, and has not lost market share by others offering Apple (NASDAQ:AAPL) products.

4) General Electric (NYSE:GE): Price - $14.80/share, yield of 4.00%, ESS Rating - Neutral

Three key factors to consider:

  1. GE has all of the ingredients to finally break out of its multi-year rut and will pay a healthy dividend while we wait for the capital appreciation from these levels.
  2. The overly negative sentiment (despite its neutral rating) which gives my contrarian view even more reason to buy more shares at these prices.
  3. GE has a very strong balance sheet as well as a huge amount of cash on hand, which supports its price as well as dividend payouts for the long term.

5) Annaly Capital Management (NYSE:NLY): Price - $15.96/share, yield of 14.90%, ESS Rating - Neutral

Three key factors to consider:

  1. The Fed has shown its hand with short-term rates. For at least two years they will be kept close to zero and not be raised.
  2. The Fed's "Operation Twist" has had little or no impact in most re-finance efforts and the administration's efforts to enhance mortgage re-financing has done virtually nothing.
  3. The very high yield is super attractive to income seekers and the "best of breed" management has proven repeatedly its ability to navigate through all scenarios thus far.

*Each of these stocks is less per share than when I first suggested them to buy.

Once we can separate ourselves from the turmoil in the market and realize that there is always something that could give us the jitters, then we can actually take a few small steps to actually strengthen our core portfolio buy adding some shares.

We are all well aware (or should be) of the happenings around us. Given our proclivity toward having a consistent flow of income as we understand our risks, we could take some of the jitters away during a nervous market.

My Opinion

I personally believe that once we have decided on our path of dividend paying solid stocks for our retirement portfolio, we can actually profit from this uncertainty. If we have some cash reserves, now could be a good time to add to our core, as we re-balance our mix for the coming year.

Of course, please evaluate your own risk tolerance as you do your research.

Disclosure: I am long XOM, JNJ, T, GE, NLY.