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Strategies & Market Trends : Value Investing

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To: Mr.Gogo who wrote (51540)	5/15/2013 10:31:37 AM
From: E_K_S	Read Replies (1) of 78683

Mr Gogo - My Buys and Sells are mainly focused on the dividend yield. I have been selling if/when the dividend yield falls below 4.5% but now I lowered that to 3.5%. I am buying if the replacement stock has an equivalent or higher yield (or possible increase in the future dividend) and the value components are more compelling. I am still finding value in several of the oil companies but my exposure to that sector is already large. I am still finding a lot of my value/income plays pointing me to MLP's or companies that are looking at spinning off a MLP operation. For those speculative plays, I am looking at companies that may benefit from a slow sustained real estate recovery. This is based on low interest rates and Fed's QE that appears to be in place for months if not years. The other area I am finding value but am too early but still nibbling are in the commodities. A stronger $US (which I believe will get stronger) makes commodities cheaper. I am slowly adding shares to many of my depressed resource companies. I also like the AG sector and many of these stocks are impacted by commodity prices. I think the key for this equity cycle are the historical low interest rates and the possible value buys (which may seem over priced today) may/will eventually benefit from longer term inflation (5-8 years out). Many of the property REITs I follow are at recovery highs and some like Realty Income Corp. (O) are at all time highs. The value proposition is if there is inflation, their assets will benefit from appreciation. These companies also benefit from historical low interest rates. I am not buying at these high levels but am not selling anything unless I find a replacement stock that works better. I am still 94% invested in equities, preferreds & bonds. The portfolio is still focused on generating dividend income but I do have a small percentage of the portfolio (about 12%) which are special situation value buys that pay no dividend. EKS

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