No Market Bottom In Sight

I had plans to write a stock review today, but the current market conditions make that seem a little foolish. I sit here watching the stock market continue to crash, pulling down all stocks, regardless of value or prospects. At this point I see no reason to sell my stock holdings as the horse has already left the barn. I also do not see any reason to buy as the market shows no sign of bottoming. At some point the bottom will come as investors will realize the tremendous values the current selling frenzy has brought about.

I would consider my Income Portfolio as fairly defensive because normally a strong dividend will keep a stock price from falling to far and increasing yield. Yet the stocks in the portfolio keep falling and the average yield of the 10 stocks is now approaching 13% including the measly 3.9% yield of City Bank (CTBK). In “normal” times this bunch of stocks should have an average yield of around 8-9%. My research leads me to believe that all of the dividends are secure and 3 to 4 of the stocks will actually increase their payouts for the next quarter. Yet share prices keep plunging. The only two stocks with any kind of price stability are City Bank and the REIT Monmouth Real Estate Investment Corp. (MNRTA).

At this point I am hoping that sanity returns to stock pricing with the next earnings release season, starting in a few weeks for the stocks I watch. At this point I must practice patience and take some hope that if Warren Buffet is willing to invest billions into this market is a positive sign for the future.

Posted in Categories: Contributor, External Research, Financial, REITs, Stocks.

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