Dividend Growth Investing, Retirement Income, Stock Market Investing, Stock Market Timing, Uncategorized

Making Minor Changes

The market was largely marking time again today. Which is perfectly alright. This is stock price consolidation effort, and when it resolves, it will typically resolve in the direction from which it had come. And since it had risen to get here, it will likely, at some point, break out to the upside.

In the mean time, Reynolds Tobacco’s earnings estimates have really taken a turn south, and its latest dividend wasn’t even a double-digit 10% increase. It’s price has started to reflect some investor disappointment, having topped $54 back in early July. It’s been slipping back since, and closed today at $49.46. It would do us no harm to let go of one issue out of 23, representing no more than 4 or 5% of our portfolio, and replace it with something that may well serve us better, going forward.

I’m thinking that JM Smucker, symbol SJM, might be just the ticket. I’d held it before and let it go some time back. It’s earnings forecasts and dividend payout had begun to suffer back, O, a year and a half ago. But, as a result of some very savvy acquisitions into more healthy and wholesome food goods, they moved away from the more heavily processed and sugar-laden kinds of things we would more commonly associate with Smucker. They’ve really upped their game, and their EPS line and more recent dividend increase show that, as does their price appreciation since.

In the future, you’ll be seeing SJM in the place of RAI. You may do the same, or feel free to just add some shares of SJM and let RAI ride forever. When it comes to this particular style of investing, there’s almost no wrong answer. I know of folks who never sell anything. If it’s not a buy anymore, they just leave it in their portfolio, and let the dividend income just keep on coming however it will with time.

There are some showing pretty decent price strength, while the market does just about nothing. Take a look at: JKHY, UNH, AOS, COST, LMT and FDS as being the best of them, in my estimation.

An update of the market timer says that risk is coming out of the market slowly, and has moved from very high, to somewhere between high and moderate. I’ll check on it again shortly, to see if we can begin to project when we might actually see another low-risk market entry opportunity.

Here’s to your successful stock market investing!
Harold F Crowell

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