Retirement Strategy: Buy On Dips, Add To Core Holdings (Part 2)

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

Last week I wrote an article about buying on the dips to enhance our existing portfolio (or even starting one). By taking that immediate action, not only would we strengthen our portfolio, but we would also tweak our yields. That approach would give us more income from an already well balanced, well diversified portfolio. Simply by adding some shares of stocks we already own for that reason, while they were on “sale”.

The stocks in the portfolio are ones that are in my own core holdings: Exxon Mobile (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), AT&T (NYSE:T), General Electric (NYSE:GE), Annaly Capital Management (NYSE:NLY).

Review the earlier article to refresh your memory. I've added Exelon (NYSE:EXC) for this article as it is also part of my core (I did not include it in my first article, for some reason).

All of these stocks offer very good dividends, are well run giants, and for any retirement portfolio (or any pre-retirement portfolio for that matter) could be considered long term, income producing investments to last a lifetime.

On the day I had the article published, the market was selling off, the shorts were in charge and fear was gripping weaker longs who might have headed for the hills.

We, on the other hand, let cooler heads prevail, and took a pro-active approach. We realize that markets will go up, down and sideways, and the background noise is just that, noise. The opportunity presented itself to add to our positions while others were selling theirs.

Today we reversed that trend with the same noise, just different tunes, so let’s take a peek and see how we did as of today:













T :




GE :












Now obviously not every chart will look like this, however is does display the power all of us have to actually turn lemons into lemonade. I hope all of my readers did at least some of the adding, and if your portfolio looks like ours, then we have done really nicely.

Actions To Take Now

1) Re-balance our portfolio even further by selling some shares of one holding and re-deploying the funds into other stocks within the portfolio

2) Take some profits, and open up new positions with different stocks you have been researching that fit into your overall strategy

3) Review the option chains of each stock and select several (or all) to sell some calls in. I would stay tight, no further out than 60-90 days. (now that you have more shares than before, even this income generator will be greater)

4) Sell some stocks that you have lost money in to offset your capital gains when you do your taxes.

5) Hold everything you have added, and wait for another dip to do this process over again

My Opinion

Now that you can see how in just a short period of time, a strategy of buying the dips and adding to your core holdings can pay off when the momentum swings, perhaps some of the fear will be put on the back burner.

Not all scenarios are as pretty as this. Some are prettier, some are ugly. Some take longer to develop, some will backfire. Those are the risks that we all are aware of, or should be.

By using this strategy, at the very least, you are placing yourself in a position to gain, and not just complain. In my opinion it makes more sense (and dollars).

I will keep this series of articles fresh, to see how we are doing from time to time. Be on the watch for them.

* Remember to do your own research prior to making any investment decisions and do not rely on the opinions offered here or on any website.

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

Additional disclosure: I personally added to each holding for my own personal portfolio.