There are several matters to bring to your attention, but first the new details:
1. The price of the S&P 500 is in an uptrend. It is at its own 50-day moving average line and that line is in an uptrend. The 50-day moving average line is above the 200-day moving average line of the 500, and it, too, is also in an uptrend. The is the classic Wall Street definition of what constitutes a Bull Market.
2. The very best looking stocks, according to the Safe-Dividend Growth Strategy that I advocate are: CVS, PII, BLK, NKE, AMGN, AOS, HRL, JKHY, COST, and ECL. I have positions in CVS, HRL, COST and ECL.
3. Market risk at this time has been moderating and falling, but is not yet near what I would deem a low-risk market entry opportunity. Wait patiently, and opportunity will afford itself. They always do.
4. I have said that 2 stocks were in danger of being sold. Those were GWW and IBM. Both have just raised their dividends to us. GWW raised from $4.32 to $4.68 a share. This $.36 a share increase is only 8.33%, and in the single digits. Because its EPS line had gone limp some time back, and because GWW was not performing price-wise in a market-leading fashion, (and that’s been because its forward-looking EPS estimates had been weakening…) and now, specifically because we invest for safe-dividend increases in the teens, Grainger World-Wide is no longer acceptable to me. I had been least favorable towards GWW for some time because I had learned that the products they sell to businesses at the retail level are simply priced too high, and are not in any way to be considered as bargains. I don’t like that, and so, I will be selling our holding in GWW with a double-digit profit.
Of keen interest is that this sale of GWW will only be the 9th issue to have been sold in all of the past 4 years! Talk to any other trader or investor, or look into the portfolio turn-over rate of just about any mutual fund, or managed money, and learn just how incredibly small our own turn-over rate is. This is another key to truly successful investing… finding issues most worthy of holding tight.
Take IBM, on the other hand. It has not been well on an EPS or price basis, but the future outlook, according to every analysis I read keeps telling me that they will successfully re-invent themselves, and they continue to be incredibly shareholder friendly, as evidenced by the dividend increase they just gave. IBM raised from $4.40 a share to $5.20 a share. This $.80 a share increase is an honest-to-goodness 18.18% dividend increase, and I just love it! Whereas, I have considered possibly letting IBM go, that was entirely contingent on how they treated me as a shareholder. Since the payout ratio is still very safe, at 37%, I’m inclined to hang on, and let them have the space and time they need to accomplish what it is that they say they are going to do.
As for our portfolio dividend increase “pay raises,” 5. my wife and I are now at 24.91% of our goal in just under 4 years time. With the sale of GWW, this will set us back a bit, but with the acquisition of something, I trust will be better suited to our purposes, we will catch right back up, and continue on at an even faster pace toward our first-year retirement income goal. We will only need to double 2 more times to attain our goal, and we can see ourselves accomplishing that by the time my wife wishes to retire from her position.
I hope this new format, which keeps taking us right back to The 5 Essential Principles of Successful Stock Market Investing, is more helpful and informative for you all. Let me know!
Here’s to your successful investing!
Harold F Crowell