After 8 years of recovery in the stock market, we stand at a valuation that’s over the historical average. see below graph
Unless we experience the same 2000 style buble, in terms of P/E ratio I don’t think there is much fuel left for growth stocks in general, of course you always have exceptions like Facebook, amazon and few others that seems to always find a way to be worth more everyday. But if you’re managing your own dividend stocks portfolio, I think it’s time to get more defensive and load up on stocks like DUK, SO, PG, D, to secure your 3 to 4 % yield and avoid getting slapped to hard on the next bear market.
It used to be easy to do a rotation back to Bonds, but yields are barely matching inflation which makes no sense to park your money there.
Of course there is a but….. If you look at the graph below we could be looking at a 3 year old secular bull market that could last another 10 to 15 years. Time will tell.
Disclosure: I am/we are long SO, DUK, PG, D.