Today, the market was in a free fall, with the DJIA down over 265 points by the time the day ended. Some investors want to pull their hair out after such a day. I don’t have any hair. Does that put me at an advantage? The debt deal got signed by Obama and the market absolutely tanked. What does all this mean?
I recently invested fresh capital twice, by adding to my position with Telefonica and initiating a new position with ConocoPhillps. If I knew the market was going to drop like this, would I have waited and deployed capital today? Absolutely. But I can’t tell the future, and my crystal ball is always cloudy. So, I purchase equities when I feel there is value in the price. I felt there was value in both my purchases. But, with the DOW less than 12,000 and the S&P currently just above 1,250, there is an opportunity here.
There are quite a few blue chips on sale right now. Pepsi, Coca-Cola and Johnson & Johnson are just a few names that are trading at levels much less than just one month ago. Pepsi, for instance, is down almost 10% over the last 30 days. There is an opportunity here.
Are you taking advantage of this weakness? If I had more capital I would have invested today. But, I rarely dip into my emergency/checking account cash as I always like to have liquid cash on hand. I expect to receive my commission check this Thursday, and with that will probably be making an immediate purchase.
Are you waiting for a further drop? I’m actually surprised the market dropped as far as it did today. I was expecting a flat market or slight uptick after the debt deal passed. The debt ceiling impasse provided uncertainty, and the markets reacted negatively over the last week. With the passing of the debt deal, there are further uncertainties to keep things uneasy. The economy is still showing extreme weakness, and is stalling. The housing market is teetering. There appears to be very little growth in the job market, and because consumers are unsure about their jobs they are not spending money. It creates a very nasty cycle. One positive note is that the U.S. is going to keep its AAA credit rating for the time being. That’s good news.
I expect to receive fresh capital later this week and I’ll further assess the situation. I do think this is an opportunity for long-term value investors to shop their favorite names at a discount. If I had more money in my brokerage account I would be snapping up some blue chips while they are on sale.
Do you smell an opportunity?
Thanks for reading.
I smell it man. Definitely buying quality dividend stocks for the long term.
I agree..buying opportunity.
Added PEP last week @ $63.50. Looking to add to positions in LMT, PAYX, TEVA, GE and KMR over the next week. WM also looks interesting.
Anonymous,
I’m glad I’m not the only one with a good sense of smell. 🙂
Pete,
Great job on the PEP pickup. I’m only going to have enough money for one purchase later this week. It’s a tough call..I like PEP and PG at these levels. I also wouldn’t mind adding to my KO holdings.
I’m not sure about WM. The declining revenues are concerning, but trash isn’t something we’re going to be producing less of.
TEVA seems like a great pickup. I looked at it at $45 a while back, but seeing as it’s well below that and finally in the 2% yield range, this might be a good time to pick it up. I already have 2 ADR’s in my small portfolio and the yield is low..but the baby boomers assure that the business of generic drugs is going to be…well…booming! I don’t hear a lot about TEVA, flies under the radar. It’s on my watch list.
I wrote about LMT recently. Solid pickup. So little capital..so many opportunities!
Keep me updated on your moves. Thanks for stopping by.
Bought 1000 TEF today at 21.59.
PG is looking attractive too, but haven’t pulled the trigger on that yet.
Mantra, yup good buy points. If only I had the money 🙂 I added 10 more blue-chips to my watch list today, and would be happy to buy all of them. For example PEP,JNJ,PG, and lots of Canadian stocks such as CP and the banks too!
Don’t worry there will be more opportunity in the days to come.
Cheers
The Dividend Ninja
Mantra,
I’ve been looking at GE for the past few weeks. After today’s whopping 4+% loss, it looks ripe for the picking. I like GE because it offers some exposure to financials, but not too much for me.
Happy buying =)
-Div Dude
Pepsi also has a super user friendly and cheap DRIP if you’re looking to add to your holdings over the long term
Definitely an opportunity! Just bought a few I’ve been eyeing for a while now!
Hi Mantra!
Great blog! I read all your updates!
I have started a similar Swedish blog. Maybe you can use google translate if you want to read. I own mostly US stocks and some European. Its interesting because I follow your blog and we are in the same situation nearly. I have like 2500 USD by year end in dividends and looking 4000 USD by 2012.
Best regards from a Swedish reader!
http://agamintid.blogspot.com/
Anonymous,
1000 shares of TEF? You must be confident about its future. I’m a big fan, as my recent buys have shown. I think it’s oversold and the yield is well covered and fantastically high. The only concern is the debt load. I think it’s a solid long-term holding and it’s now one of my bigger positions.
Cheers, and I hope for the best…for the both of us!
Ninja,
Thanks for stopping by!
I agree with you on the blue chips…definitely on sale. I’m especially looking at PG and PEP. Both great deals at these levels. Oil has also come down. I would have been better served by waiting on my COP purchase, but again, I feel I received value on my price.
I hear you on the need for capital. You and me both! I’m itching to buy as soon as my large check comes in.
Keep in touch!
Div Dude,
I have looked at GE. It seems like a good value at these levels, but the recent dividend cut still stings a lot of dividend investors. You wonder if it has to prove itself by staying on track for a few years. I like it at the current price, but I’d love it closer to $15. GE is a complicated company, but I’m glad the financial arm make up less of it. Good luck if you decide to buy!
Take care. 🙂
No Debt MBA,
Well, that’s just one more wonderful thing about a fantastic company. Great price for a dominant snack company with a great beverage business. I have my eye on it now!
Thanks for stopping by.
MoneyCone,
What did you buy? I’m always interested in other investor’s moves. Some blue chips or something a little high risk/high reward? Keep in touch!
agamintid,
Thanks for stopping by, and it’s wonderful to hear from a reader across the globe! It’s wonderful to see dividend investing alive and healthy in Sweden! I visited the blog, but the translator didn’t pop up for me. I’ll try again.
You are definitely ahead of me in terms of dividends. Great numbers, and keep up the fantastic work. You are investing an incredible amount of money to increase your dividends by $1,500 in one year. Great stuff.
Please keep in touch, and I love hearing from Sweden. It’s good to know what’s going on across the pond!
For long term investors that thought 8/2’s market drop was a good opportunity, 8/4’s atypically large slam is an even better opportunity.
PEP: On sale 1.75%
JNJ: On sale 2.48%
KO: On sale 3.77%
NVS: On sale 4.16%
EMR: On sale 5.02%
And these sales are compounded after a week or two of drops.
Monk,
Today was an incredible opportunity. Unfortunately, I squandered a bit and bought in the morning. I didn’t think it would trend down that far, that fast. I added to my holdings with CVX mid-morning. I should have waited until the end of the day. I have a small amount of capital left and didn’t plan to deploy any more until next month. We’ll see what Friday holds.
An incredible drop today! Did you make any purchases? I know days like today is when you want to keep the powder dry..and I received my commission check today, with perfect timing. I really missed my opportunity by buying early in the day.
I added to my positions in KMR, PAYX, and TEVA today.
Pete,
TEVA is particularly interesting to me. It’s extremely cheap right now. Huge growth. Is it a large position for you?
DM, TEVA is one of my newest postions so it is not that large. I too like the growth potential and will continue to add below $50. At current levels, I think its a steal! I also like and am long BDX, ABT, and JNJ (I am overweight health care).
There are some real bargains right now. ABT below $50, PG below $60, KMR below $60 and currently yielding almost 8%.
I am eagerly watching PM (started building my position @ $44) and if it drops into low $60’s am going in big. IMO, PM is the pick for the next 20 years.
I like MO also.
“Unfortunately, I squandered a bit and bought in the morning.”
Eh, don’t worry about that. Market timing rarely works, and there are a zillion shoulda-coulda’s out there.
“Did you make any purchases?”
I increased my international exposure via an exchange traded fund in the morning of 8/4 since international indexes fell even harder than domestic ones. In addition to my individual stock portfolio, I use indexes for diversification. And I added to my position to ETE on 8/5 (ETE fell even harder over these days, and their quarterly update was actually fairly positive).
Pete,
Love all your picks. I got into PM in the mid-$50’s. You got in at a great time. I agree with you that PM is going to be a great pick for the next couple decades.
I agree with you on all points. Superb value out there for the long-term investor. TEVA does appear to be a steal right now. The only reason I haven’t already invested is because I already have 2 ADR’s and it has a very low yield.
Keep me updated. I love your ideas!
Monk,
Thanks for the reassurance. My jaw dropped when the market dropped another 200 points a few hours after my purchase.
Great job on the diversification. I love international exposure and I currently have mine through TEF and TOT, although most of our large U.S. corporations are international anyway. I would argue my TOT is probably my worst pick so far.
Keep in touch. Good hearing from you.