Did you look to see what his funds hold? I did not get around to it.
I am a believer in not doing anything, or rather, in not having to have a compulsion to do something just to be active..so take it easy for a year or two, until things get cheap or you have a different outlook.
Am copying a post from someone else about div stocks. The chart is interesting, and lot of them are at the same levels now as in Oct '08, a time when many people thought things had already gotten cheap. (One of the big winners was Freeport Mac.--have all mining stocks had a huge run? Maybe Imp has been 50% stock selection and 50% sector participation??) I notice MO is about the same, if you can stand tobacco that might be interesting..big divs, lotsa cash.
Cross post follows:
On 10/19/08, I proposed to my parents they they take a bunch of cash they had maturing in CDs and invest it in a diversified portfolio of stocks with above average dividend yields. I thought the market was close to a bottom and with a 5.37% portfolio yield, there was room for some dividends to be cut and still outperform CDs without any stock appreciation. Since this was money they didn't need for 5 years at least, they could afford to have further quotational losses.
I created a dummy $200k portfolio and had ~$10k positions in 20 different companies, so basically equally weighted 5% positions. I tried getting quality stocks from different industries, however I did not include any MLPs or REITs as I wanted only tax advantaged distributions.
The $200k portfolio proceeded to decline to, I think, $140k, perhaps even lower, so it was definitely not close to the bottom. Many companies cut dividends, a few have actually raised them. The 5.37% initial yield had declined to 3.22% on the initial cost, as of 10/19/09, 1 year later. It paid 3.75% in dividends during the first 12 months. I have not kept up with dividend changes or dividends paid since then, however I suspect it is slightly higher now.
Today, the $200k initial portfolio would be worth over $280k when the approximately $10k in dividends are included. That's a greater than 40% return, vs a 29.7% return in the Wilshire 5000. Pretty impressive Alpha when the bogey I was trying to beat was a 4-5% CD.
It's worth noting that 2 of the top 3 performing companies cut their dividend completely. The third, and best performing one, only cut its dividend by 66%. Each of these three stocks are up over 100%.
Not every stock that cut its dividend performed well; 5 of the 6 bottom performers also cut their dividends. However, only 1 stock is down, after taking the dividend into account (maybe 2, 1 is close to break even).
Dr. Ed (oh how I wish he'd come back!) used to say that when a company cut it's dividend, it was a sign to buy. I think that's the case here. I remember the day FCX cut their dividend, it fell to $17. It's now over $80. That's a heck of a return. Selling stocks that cut their dividend, as many dividend mutual funds are required to do, is a horrible strategy. I had initially included WFMI at $14 but they had just cut their dividend so I replaced it with something else. It would have been the 2nd best performing stock in the portfolio.
Anyway, here's the portfolio, if anyone is interested:
spreadsheets.google.com.
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