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
Democrats Willing To Kill 90,000 COVID Patients To Discredit Trump
Data Confirms Big Tech’s Left-Wing Bias
Gramsci’s Plan to Overwhelm Christianity With Socialism Using Culture
Europeans Discover The Myth About ‘Safety Nets’ The Hard Way
5 Things Christians Can Do To Win With Money
Biggest Economic Drivers Are Most Poised To Come Back
5 Things The Millionaire Next To You Is Doing With Their Money That You’re Not
What’s Wrong With Limited Liability Corporations?
Our Dishonest Ruling Class
Innovation Springs From Liberty
Social Justice Warriors Must Address Core Problems
Things Are More Dangerous Than People Think
The 2020 Election And Your Portfolio
The Destructive Obsession With Equality
Fascism Is Socialism: Here’s The Proof
Paul On Meat Sacrificed To Demons vs. Mandatory Market Disengagement
The Fed In A Post-COVID World
Follow Us
The Affluent Mix
Data Confirms Big Tech’s Left-Wing Bias September 17, 2020 | Charles Bowyer
Democrats Willing To Kill 90,000 COVID Patients To Discredit Trump... September 17, 2020 | Roger McKinney
Biggest Economic Drivers Are Most Poised To Come Back... September 17, 2020 | Jerry Bowyer
The Destructive Obsession With Equality September 17, 2020 | Jim Huntzinger
The 2020 Election And Your Portfolio September 17, 2020 | David Bahnsen
Europeans Discover The Myth About ‘Safety Nets’ The Hard Way... September 17, 2020 | John Tamny
Inflation By Fiat September 17, 2020 | Michael Pento
Innovation Springs From Liberty September 17, 2020 | Daniel McLaughlin
Manufacturing A Recovery September 17, 2020 | Jerry Bowyer
5 Things The Millionaire Next To You Is Doing With Their Money That You’re... September 17, 2020 | Eric Schrum
Politicians And Pundits Vs. The People September 11, 2020 | Frank Vernuccio
If You Want To Worry About Something, Worry About This... September 11, 2020 | David Bahnsen
Dismiss The Federal Reserve Alarmism, There’s No Such Thing As ‘Dollar Short... September 11, 2020 | John Tamny
National Reconstruction Begins September 11, 2020 | Jerry Bowyer
Q2 Was Tough On Those Who Panicked At The End Of Q1... September 11, 2020 | Jerry Bowyer
The Founding Fathers Understood September 11, 2020 | Jim Huntzinger
Things Are More Dangerous Than People Think... September 11, 2020 | Daniel McLaughlin
5 Things Christians Can Do To Win With Money... September 11, 2020 | Eric Schrum
Social Justice Warriors Must Address Core Problems... September 4, 2020 | Daniel McLaughlin
Our Dishonest Ruling Class September 4, 2020 | Frank Vernuccio
The Fed In A Post-COVID World September 4, 2020 | David Bahnsen
Dear Conservatives: Excess Taxes ‘Voluntarily’ Paid By Liberals Are A Tax On... September 4, 2020 | John Tamny
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.