Long-Term Investors Have Been Waiting For This Sell-Off
A trader works on the floor of the New York Stock Exchange.
(Photo by Spencer Platt / Getty Images)
Ebola, ISIS, Europe, China, Russia, retail sales, manufacturing. Take your pick. Wednesday’s sell-off in the market is being blamed on all of them. But it doesn’t really matter what you blame it on. The bottom line is that the sell-off in stocks is just a return to normal.
It is normal to see the market sell off by about 10% every 18 months or so; but it has been three years since the last time that happened. It is normal for stocks to exhibit volatility; but volatility has been almost nonexistent since 2011.
Long-term investors should welcome sell-offs like Wednesday’s. This doesn’t mean stocks won’t go lower before they go higher. But if you’re investing for the next 5-10 years (rather than for the next day or two) sell-offs often represent good buying opportunities. That’s why you should always have some cash available so you can take advantage of sell-offs. And you should always make sure that you have a proper allocation to different asset classes and that you are properly diversified within asset classes. Also, don’t forget to rebalance your portfolio from time to time.
And here’s something else to consider. The 10-year Treasury bond now yields less than 2%. There are many stocks that pay dividends higher than that! In other words, you are guaranteed to make almost no money in bonds. With stocks, you stand the chance for capital appreciation over the long run and you can get paid a decent amount while you wait.
Here are few of my favorites right now: Verizon (VZ) yields close to 5%. It should benefit for quite some time from the roll out of new iPhones. McDonald’s (MCD) has a yield that is close to 4%. The stock is depressed due to troubles in China and Russia, but those will eventually pass. Intel (INTC) just announced outstanding earnings, yet sold off on the news. It yields 3%. Given the low yield on bonds, I’d rather put new money to work in stocks like these.
Read Vahan’s blog at Janjig.com.
Vahan Janjigian is Chief Investment Officer at Greenwich Wealth Management, LLC, a SEC Registered Investment Adviser, where he manages portfolios for clients in separate accounts. Dr. Janjigian is a former Forbes magazine columnist and former Editor of the Forbes Special Situation Survey. According to Hulbert Interactive, his stock picks returned more than 18% annually during one of the market’s worst 10-year periods.
Dr. Janjigian holds the Chartered Financial Analyst designation and has earned degrees in general sciences and finance from Villanova University and Virginia Polytechnic Institute and State University (Virginia Tech). He previously served on the faculties of several universities, including the University of Delaware, Northeastern University, the American University of Armenia, and Boston College, where he taught courses in corporate finance, financial theory, investments, accounting, and economics; and he currently teaches a seminar on equity investment management to business executives in Singapore through Baruch College’s Zicklin School of Business. Dr. Janjigian has served as an expert witness on matters involving portfolio management, churning, suitability, and hedge fund manager compensation.
Dr. Janjigian has published his research in numerous scholarly and professional journals; and has been quoted in many leading newspapers and magazines, including Barron’s, Forbes, The Wall Street Journal, and USA Today. He appears as a guest commentator on various television and radio networks, including Fox, CNBC, MSNBC, and CBS Radio. Dr. Janjigian is the author of Even Buffett Isn’t Perfect (published by Penguin) and co-author of The Forbes/CFA Institute Investment Course (published by Wiley).
Trending Now on Affluent Christian Investor
The Only Path To Economic Equalization Is Tyranny
Global Warming Honcho Shockingly Honest About Climate Change Policy
Nude is Natural: Should Clothing be Optional?
Recent Fed Repo Intervention Isn’t Just A ‘Plumbing’ Problem, It’s A Regulating Problem
Reversing Regulations
Are You A Kingdom Worker?
Full Employment Is Full Foolishness
Media Says Trump’s Presidency Is Over, What Do Markets Say?
Sanders And Warren Mistake Money For Wealth
The Ebola Epidemic Is Dying
Why The Latest Global Warming Report Is Politics, Not Science
Startups Need Church Encouragement More Than Shark Tank Competitions
Shemitah Years and Blood Moons as Market Timing Tools
Respect for God and Gratitude: How Toyota Rose On More Than Just Hard Work
The Scandal Of Christian Socialism
With Regard To Facebook’s Libra, What Are The Feds So Afraid Of?
Greta’s Right About One Thing: Someone Has Stolen Her Childhood
Follow Us
The Affluent Mix
The Only Path To Economic Equalization Is Tyranny... October 23, 2019 | Jim Huntzinger
Global Warming Honcho Shockingly Honest About Climate Change Policy... October 23, 2019 | Daniel McLaughlin
Reversing Regulations October 23, 2019 | Frank Vernuccio
Recent Fed Repo Intervention Isn’t Just A ‘Plumbing’ Problem, It’s A... October 23, 2019 | Keith Weiner
With Regard To Facebook’s Libra, What Are The Feds So Afraid Of?... October 23, 2019 | John Tamny
Startups Need Church Encouragement More Than Shark Tank Competitions... October 23, 2019 | Kevin Cullis
Sanders And Warren Mistake Money For Wealth... October 15, 2019 | John Tamny
Media Says Trump’s Presidency Is Over, What Do Markets Say?... October 15, 2019 | Charles Bowyer
Political Power Is The Ring That Should Be Destroyed... October 15, 2019 | Roger McKinney
Full Employment Is Full Foolishness October 15, 2019 | Jim Huntzinger
Giving Government Power To Protect Us From Corporate Power Makes Things Worse... October 15, 2019 | Daniel McLaughlin
Gold: It’s All About Real Rates, Not The Dollar... October 15, 2019 | Michael Pento
Don’t Be A Religious Marketplace Martyr, But A Responsible Marketplace Maker... October 15, 2019 | Kevin Cullis
San Francisco vs. First Amendment October 8, 2019 | Frank Vernuccio
A Friendly Debate With A Leading Longevity Scientist About Keto... October 8, 2019 | Jerry Bowyer
Can Trump Back Away From Trade War In Time To Avoid Recession?... October 8, 2019 | David Goldman
Greta’s Right About One Thing: Someone Has Stolen Her Childhood... October 8, 2019 | Daniel McLaughlin
Keynesian Economics: A Theory With 80 Years Of Failure... October 8, 2019 | Jim Huntzinger
Self-Promotion Works Best When Promoting Others First... October 8, 2019 | John Tamny
Does God Want Britain To Be A Great Nation?... October 1, 2019 | Vishal Mangalwadi
The Scandal Of Christian Socialism September 30, 2019 | Roger McKinney
Shocker: Only Six House Democrats Voted Against Illegal Immigrants Voting... September 30, 2019 | Frank Vernuccio
Join the conversation!
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse.