AIA Advocate for Absolute Returns : Blue Chips

Association of Investor Awareness - Week of 07/30/2009

Research & Editorial Staff — Thu, 30 Jul 2009 16:10:00 GMT

In This Issue:

Stocks Got A Second Wind In July
But, How Long Will It Last?
Technology Appears To Be Turning Around
Blue Chips Top The Best Sellers Chart
The Economy Looks Better, But Not Great
Asia's Growth Is Much Stronger
A Single Stock Covers China And Its Neighbors
The Bottom Line This Week

As everyone knows all too well, the government has been working overtime to send billions of dollars in bailout money to banks. That's only fair since the poor banks depleted their resources taking such good care of us. And they say there are no more American heroes.

In any event, some of that money found its way to the stock market where it triggered the nice rally that has been warming our hearts and wallets for several months.

Stocks Got A Second Wind In July

Whatever the reason for the rally may be, after stocks hit their nadir on March 9, prices climbed an impressive 38.5%. The gains put all the major averages into positive territory for the year, an accomplishment that no one would have imagined possible a few months ago.

The big question now is, should we put away the party hats, or does the rally have further to go?

But, How Long Will It Last?

The best way to answer the question is to look at valuations. After the recent run-up, most high quality stocks are trading at about 15 times estimated earnings. That's between three and five points higher (depending on the stock) than the bear market lows. It's clear that the market is no longer in the bargain basement.

But 15 times earnings is also between three and five points below typical market tops. That means stocks could have further to run, particularly if investors look beyond 2010 for company earnings. Economic growth by then should be strong enough for efficient companies to increase their profits significantly.

Another way to answer the question is to look at the performance of individual sectors. Since consumers are counting every penny, the retail industry hasn't been doing well – and probably won't for quite some time.

Technology Appears To Be Turning Around

On the other hand, many technology companies have been making good gains, especially those that do a lot of business in countries with strong economies. We think tech could keep going quite a bit longer even if the broader market begins to sag.

Happily, many of the best-performing tech stocks were recommended in this newsletter. The list includes Apple (AAPL) Intel (INTC), IBM (IBM), Cisco Systems (CSCO), and Oracle (ORCL) – to name only a few.

Besides having robust sales, technology companies also look good because they are not burdened by debt or underfunded pension plans. Neither are they facing the blizzard of new regulations that Washington has coming down the pike for many former highflying companies.

Within the technology sector, however, investors are being very picky. Microsoft, for example, is currently out of favor. The company just reported its first ever fall in sales on an annual basis. Likewise, Dell drove many investors away when it warned that the public's preference for cheaper laptops is having an impact on its profit margins.

Blue Chips Top The Best Sellers Chart

In addition to several of our tech recommendations, many of our other stocks have also been doing well. The rally even gave an 8.2% boost to the picks from our June newsletter. Here are the numbers:

The point isn't that a group of our stocks did well. It's been known to happen. The important message is that blue chips are what investors have in their sights.

That's exactly what we would expect in a damaged economy where a recovery can only be low and slow. Tough conditions always favor large companies that are well established in their markets. The big boys can dig in and eke out profits when growth isn't strong enough to support smaller firms.

Most blue chips are also in the catbird's seat to make full use of faster-growing foreign opportunities. The big multinationals are everywhere. They almost always have at least one market that is hot. Today, the sizzler is China. India is cooler, but only by comparison to its bigger neighbor. India's 4% growth is a skyrocket compared with most countries.

There is another reason that blue chip stocks are doing well. The inflation cycle, that nearly everyone is expecting, has yet to arrive. Instead, deflation is still hammering the economy. Everywhere we look we see it at work. Job losses, wage reductions, rising foreclosures and bankruptcies, and sinking asset values fit the pattern chapter and verse. In addition, deflation has so much momentum, it may persist into 2010.

In a deflation, of course, cash is king. That makes dividends much more valuable than they are in rosier times. Most dividend stocks are blue chips. That's pretty much the end of the story.

The Economy Looks Better, But Not Great

Many investors attribute the stock rally to a positive change in the economy. However, about the most that can be said about it is the recession is weakening. Perhaps it has even hit bottom.

However, slowing down is a far cry from saying that a recovery is about to begin. Considering the amount of damage that's been done, it's likely to be quite awhile before growth can return to anything that resembles normal.

The biggest obstacle to a rebound is most consumers are no longer able to shop until they drop. Since consumer spending makes up 70% of the GDP, the slowdown is having a big impact. Until America's cash registers start playing tunes again, the economy won't do much better than limp along.

Unfortunately, Joe and Sally won't be back to the malls and auto dealers anytime soon. Not only are people being hammered by the recession, most of them are still mired in debt from their last big bash. The hangover won't go away for at least a year, and probably two.

Housing is also unable to make its normal contribution to growth. Although home prices have been inching up in some areas, it's too early to call a turn in the market. As with the recession, housing may be bottoming, but that doesn't mean a rebound is close at hand.

Asia's Growth Is Much Stronger

The economic outlook is far brighter in many foreign countries, especially those in Asia. The Chinese are leading the pack once again with an impressive 8% growth rate. The strength surprised many analysts because the weak American economy greatly reduced the demand for China's exports.

However, with 1.2 billion people, China has the world's largest domestic market. In addition, the country is like a young married couple that is just starting out – they need virtually everything. Filling the demand could keep China's economy in high gear for years.

The majority of China's neighbors are also doing well, and for the same reasons. India, for example, has a billion people that are starting to improve their lives. Taken together, the remaining Asian countries have another billion consumers.

The bottom line is, investors who are looking for excellent gains should include Asian stocks and funds in their portfolios. Of the group, China currently looks the most attractive.

A Single Stock Covers China And Its Neighbors

We continue to like the long-term outlook for China Mobile (CHL). The company offers every wireless service imaginable – including voice, text, long distance, music downloads, video, caller ID, and conference calls – to name only the most common. http://finance.yahoo.com/q/bc?s=CHL

China Mobile also does business in other parts of Asia. The company has 451 million customers, which boggles the mind. That number is 151 million higher than the entire population of the U.S.

Nevertheless, the mobile market in Asia is nowhere near saturated. China Mobile has a good record for growth, and it is currently paying an attractive 3.4% dividend. What's not to like?

The Bottom Line This Week

The stock rally is lasting longer than we expected, not that we are complaining. After such big gains we think it's time to become more cautious. If you have nice profits, it's probably a good idea to take some of them off the table. Please protect your remaining portfolio with stop-loss orders.

Going forward, we think the majority of Wall Street's winners will be blue chips with large foreign businesses. Technology stocks look particularly good. So do leading Asian companies such as China Mobile.

One investment we would avoid at this point is a broad market fund. From this point forward, you should do better if you trade your shotgun for a rifle.

Until Next Week

The AIA "Advocate For Absolute Returns", a weekly publication of The Association for Investor Awareness, Inc., tracks market trends, industry news, the SEC, global trade and finance and Washington developments for you because they affect your investments. But who doesn't? Many sources report these issues as abstract facts. We feel that's not enough. The AIA Advocate's job is to warn you of what's important and how these developments translate to ground-level forces and threats that directly affect your wealth as well as your current investment opportunities. Not just information, but information you can use. Until next Thursday...

Association of Investor Awareness - Week of 02/26/2009

Research & Editorial Staff — Thu, 26 Feb 2009 14:43:00 GMT

In This Issue:

The Federal Bailout Is A Mixed Bag
Capitulation May Have Been Reached
Some Blue Chip Stocks Will Win Blue Ribbons
A Speculation Is Also Attractive
Gold Regains Its Appeal, But There Are Problems
An Economic Indicator That We Can Love
The Bottom Line This Week

Since our last newsletter on January 29, the stock market took a sharp turn for the worse. In fact, calling it a "turn" is an understatement. "Plunge" would better describe the 9.6% and 4.4% declines in the Dow and the Nasdaq. The slide left the market at a 12 year low.

Curiously, the plunge isn't due to another panic. At this point in the long bear market, most investors are too tired to sprint for the exits. Instead, many of them are dropping their gear and are simply walking off the field.

The Federal Bailout Is A Mixed Bag

Although we wish it were otherwise, we think the market will continue to drop until values become so attractive that they can no longer be ignored. Last month we thought that point had been reached, but the combination of poor economic news and a poorly executed federal bank rescue program sent another wave of discouraged investors to the sidelines. Most people now think the feds are "just winging it" and they won't be able to save the banks or the economy after all.

Overlooked during all the worries about the bank bailouts are other parts of the $787 billion federal package. Many of the individual programs have proven to be effective economic boosters during past downturns. About $315 billion will go towards education and job training. Nearly $190 billion will be spent on direct aid to states. Another $236 billion will go to tax breaks for families, renewable energy credits, and a temporary fix for the dreaded AMT. Most of that money will flow into the economy within a year.

Nevertheless, it now looks as if the economy may not begin to dig itself out of its hole until early 2010. That's not a huge setback from the late 2009 prediction that was becoming common. However, there is a big psychological difference between 2009 and 2010 that is having an outsized impact on investors. As we said earlier, many people don't want to stick around the stock market much longer.

Capitulation May Have Been Reached

The dark mood that is rapidly spreading on Wall Street may have a positive ending. As we said in a previous newsletter, bear markets rarely end until most investors are thoroughly discouraged, and they pull out of the market. Once the capitulation stage is reached, stocks typically start to move up again. Moreover, the final recovery doesn't turn into another bear trap. Instead, it just keeps going.

No one can know if the latest stock plunge marks the bottom of the severe bear market. However, with stocks down nearly 50% from their highs, we are almost certainly closer to the bottom than we are to the top.

Some Blue Chip Stocks Will Win Blue Ribbons

As a result, we continue to urge investors to use this opportunity to buy the bluest of the world's blue chip stocks for prices we have not seen in nearly two decades. Dozens of top-quality companies with very bright futures are in the bargain basement. If you don't make use of this unprecedented Wall Street sale, we think you will kick yourself within a few years.

JP Morgan Chase (JPM) is a case in point. http://finance.yahoo.com/q/bc?s=JPM Unlike most of its rivals, the company is solidly profitable. Not only did the bank stay in the black last year, it is making money now in the toughest economy we've had in recent memory. That's an enormous achievement that shows the underlying strength of this multinational powerhouse.

Nevertheless, JPM is down 54% from the high it reached during the boom. Investors are so afraid of the banking industry, they don't even want to own the best of the group. That shortsightedness is creating an opportunity for more reasoned investors to pad their long term portfolios with this world-class bank at a very low price.

Archer Daniels Midland (ADM) is another multinational blue chip that is ridiculously cheap. http://finance.yahoo.com/q/bc?s=ADM The company is in Wall Street's dog house for two reasons, neither of which will last more than a year or so. First, the slow economy is starting to hit food sales. Secondly, the company's ethanol business has been put in mothballs because oil prices collapsed from $149 a barrel to just $39.

However, food sales are projected to increase worldwide as governments make giant-sized purchases later this year to satisfy their hungry populations. Moreover, most of the money will go for bulk foods, which is the core of ADM's business.

Energy prices will also rebound once the global economy begins to recover. Because oil reserves were drawn down quite a bit during the recent economic boom, when demand picks up again prices should rise even faster, and probably go higher, than they did last time. When it happens, Archer Daniels Midland will be able to put its ethanol business back on line.

A Speculation Is Also Attractive

Even some stocks that are under a cloud are worth your consideration. It's all a matter of the risk/reward balance they offer. If prices are so low that the downside is very small, and the upside could be huge, it can make sense to make small purchases.

Ford (F) is one such stock. http://finance.yahoo.com/q/bc?s=F Unlike Chrysler and General Motors, Ford has not asked for a handout. In addition, critics are all agog about the new 2010 Ford Fusion hybrid family sedan. USA Today called it "the best gasoline-electric hybrid yet." And it has "the industry's smoothest, best-integrated gas-electric power system." Car and Driver put the Fusion up against the Camry Hybrid, the Chevy Malibu Hybrid, and the Altima Hybrid and said "it topped the others…."

Lastly, Ford would obviously be helped if its rivals need to pare back production to stay afloat. GM already plans to dump its Saturn, Saab, and Hummer brands, and Chrysler may not survive at all.

Gold Regains Its Appeal, But There Are Problems

The sinking stock market, poor fixed income returns, possible bank failures, and weak currencies, are prompting countless investors to buy gold as a last refuge. On February 20, the price of the metal came within $25 of reaching its all time high of $1,030 set in March 2008.

Many bulls are convinced that gold will continue to rise in the coming months. They correctly point out that in inflation adjusted dollars, the metal would need to reach $2,200 just to match the price it briefly hit in 1980. Of course, just because gold soared 28 years ago is no guarantee that it will do so again.

In fact, many gold critics say if the metal isn't blasting through the ceiling now, it probably never will. They argue that the economy is in much worse shape than it was in 1980, and so is the outlook for many financial institutions. So they ask, what is gold waiting for? One of our group quipped that if conditions must get twice as bad as they are now to make gold twice as expensive, we will all be back in the stoneage.

Gold's biggest liability is it doesn't do anything. It doesn't make products, grow crops, or otherwise add to the world's real wealth. That's why it almost always sinks when the economy is strong enough to support productive activities.

We think gold makes sense for part of an investor's portfolio, but don't plan on a long hold. For most people, the best way to buy the metal is with the SPDR Gold Trust (GLD) that holds over 1,000 tons of the stuff. http://finance.yahoo.com/q/bc?s=GLD The ETF is easy to buy and sell, there are no storage or theft issues to deal with, and it mirrors the price of gold almost to the penny.

An Economic Indicator That We Can Love

According to the Bespoke Investment Group, http://bespokeinvest.typepad.com/bespoke/ one of the most accurate of the non-traditional stock market indicators is the annual Sports Illustrated Swimsuit Issue. Over the past 30 years, an American has been on the cover of the issue 16 times. In 13 of those years the gain in the S&P 500 was a whopping 81.3%. Overall, the average was a still-healthy 10.6%.

We've decided that the indicator's sterling track record shows that we should pay more attention to the Swimsuit Issue. Accordingly, we have ordered several copies for our analysts that we will examine closely for clues to the economy. We never tire of working for your welfare.

The Bottom Line This Week

The stock market declined sharply last month when investors lost faith in the government's ability to save the banks and turn the economy around. The sour mood feels very much like a classic bear market washout that is typically followed by a rebound.

Although there is no guarantee that the same happy event will happen this time, we think many stock values have become too attractive to ignore. Looking particularly good to us are JP Morgan Chase and Archer Daniels Midland. More aggressive investors should consider Ford, a stock that might deliver extraordinary gains as America's only surviving automaker.

Association of Investor Awareness - Week of 01/08/2009

Research & Editorial Staff — Thu, 08 Jan 2009 18:52:00 GMT

In This Issue:

It's Time To Start Looking Beyond Current Woes
A Big Cash Horde Is Always Bullish
When It Comes To Rebounds, Too Early Beats Too Late
Eight Blue Chips Many Pros Are Buying
The Bottom Line This Week

There's nothing like the start of a new year to shake investors out of a funk. It happened again a few days ago when the market rallied as the first of January approached. The week the calendar turned over, the Dow and the Nasdaq went up an impressive 6.1% and 6.7% respectively. It was an encouraging end to a dismal year that saw the two indices plunge 33.8% and 40.5% - the third worst performance in recent memory.

Alas, it is far too early to declare an end to the bear market. With manufacturing and home sales dropping to very low levels, it is clear that the economy is still sinking. But as we will discuss later, that doesn't mean that a recovery is off the table for late 2009.

Meanwhile, stocks stumbled during the first three days of this week. By Wednesday afternoon, the market had given up 265 of its hard-won points from the short bout of New Year enthusiasm.

It's Time To Start Looking Beyond Current Woes

Although the market is continuing to be volatile, the uptrend may have longer legs than events this week would suggest. As we reported in a recent issue, investors seem to be losing some of their sensitivity to bad news. Either everyone is so numb that nothing registers anymore, or investors believe the economy is bottoming out and some cautious buying is in order.

We suspect that the latter is the case. The investment press is starting to report that many Wall Street pros with noses for value are starting to launch bottom fishing expeditions. Although nobody is putting everything they have into the market, the amounts being invested are growing steadily.

One of the intrepid investors is Steve Leuthold of the Leuthold Group, a respected institutional research firm in Minneapolis. www.leutholdgroup.com Mr. Leuthold has been a bear for quite some time because he was one of the first analysts to realize the economy was heading for trouble. Recently, however, Mr. Leuthold said, "The stock market is presenting you with one of the great buying opportunities of your lifetime – perhaps the greatest. Stop trying to pick the bottom."

Another good analyst who is starting to pick up bargains is Jim Powell of the Global Changes & Opportunities Report. (www.powellreport.com) In his January newsletter, Mr. Powell wrote, "The CEO's of America's better companies are not jetting around the country in their Gulfstreams asking taxpayers to bail them out. Instead, they are adapting to today's tougher business conditions. Workforces are being slashed, wages are being rolled back, expansion plans are being put on hold, pensions are being cut, and businesses are otherwise becoming lean and mean. Those changes are causing a lot of pain in America, but they are also allowing many companies to earn profits in this damaged economy." Looking particularly good to Mr. Powell are oversold blue chip stocks with global operations.

Not every investment professional is taking long-term positions. Laszlo Birinyi of Birinyi Associates, a money management and research firm in Westport, Conn. is batting for yards rather than touchdown passes. In an interview in the January 5 Barron's, Mr. Birinyi said "We are willing to set up for 10% or 15% gains, especially in a short time period because we've seen the markets reverse so often and so swiftly."

A Big Cash Horde Is Always Bullish

When stocks started to plunge last year, billions of dollars were taken out of the market and were placed in cash accounts. The American Association of Individual Investors estimates that cash now represents 42% of portfolios, an unprecedented amount.

Unfortunately, cash isn't earning good returns anymore – as you are probably painfully aware. The interest rate on 90-day T-Bills is essentially zero. Even 10 year Treasuries are paying only 2.50%. As one retiree said recently, "I went from a comfortable meat and potatoes income to barely getting enough money to buy dog food."

Not surprisingly, investors are more than a little anxious to find a better home for their dollars. When the stock market starts to look attractive again, the flood of money back to Wall Street could give us one of the greatest bull markets in history.

When It Comes To Rebounds, Too Early Beats Too Late

We don't know when the economic tide will turn back up. As we said in recent issues, there is a good chance that we could see some relief towards the end of the year. But even if the market as a whole takes longer to rebound, many individual stocks should start to recover some of the ground they lost during the plunge. In fact, some have already started to rise – as many price charts quickly reveal.

As to the broader market, prices typically begin to recover from a steep downturn from six to nine months before economic growth resumes. That means investors must have the fortitude to buy what they want while the economy is still on the ropes.

It is also typical for new bull markets to deliver most of their gains within a few months –or sometimes weeks- after getting underway. That's another reason that investors should be positioned before a rebound begins.

Eight Blue Chips Many Pros Are Buying

We are not inclined to report what stocks other analysts are recommending, no matter how well known they may be. However, we make exceptions when the luminaries share our foresight, clarity of thinking, and brilliant analysis. Here then –in no particular order- are eight stocks that many pros have been buying, and a few reasons why they are attractive.

Johnson & Johnson (JNJ), an old favorite of ours, is up a bit in price but it still looks attractive with a 13.8% P/E and a 3% yield. http://finance.yahoo.com/q/pr?s=JNJ Earnings will be lower than usual this year but this global supplier of healthcare products has great long-term prospects. JNJ is a Dividend Aristocrat that has increased its payout in each of the past 25 years.

Kinder Morgan Energy Partners (KMP), another of our selections, is an energy storage and pipeline master limited partnership (MLP) that yields a whopping 8.6%. http://finance.yahoo.com/q/pr?s=KMP The issue is down with energy prices, but that appears to be a mistake. The volume of fuels being transported is remaining high.

Consolidated Edison (ED) is a major utility that operates in New York, New Jersey, and eastern Pennsylvania. http://finance.yahoo.com/q/pr?s=ED Since the company's customers have a good history of paying their bills in good times and bad, the yield seems secure. The company's location in normally high-growth areas means it should see more business when the economy begins to recover. This Dividend Aristocrat currently yields 6%.

Deere< (DE) is a well-known maker of farm equipment that does business worldwide. http://finance.yahoo.com/q/pr?s=DE What is less known about Deere is it also makes construction equipment that should be in demand as President-elect Obama's infrastructure projects go into gear. The yield is a modest 2.7% but the prospect for excellent capital gains makes Deere very attractive.

Transocean (RIG) is a world-class deep ocean drilling company whose shares dropped steeply as energy prices tumbled. http://finance.yahoo.com/q/pr?s=RIG However, energy prices are only down because global economic growth has declined. When it recovers, energy will shoot back up again. In fact, oil is already starting to rise. As with Deere, Transocean is primarily a capital gains play.

VF Corporation (VFC) is an anomaly in the clothing industry because its higher end outdoor products held up well as the recession set in. http://finance.yahoo.com/q/pr?s=VFC Although investors are starting to notice that they oversold this stock, the P/E is still just 9.9. The yield is 4.1%. The company also has a top management team that has accumulated $600 million in cash, some of which it may spend on acquisitions this year.

United Parcel Service (UPS) also saw its business hold up well when the recession set in. That's partly because Internet sales remained healthy and UPS is the web's biggest product delivery company. http://finance.yahoo.com/q/pr?s=UPS Of course, UPS is also a good play on the broad economy which is probably why Warren Buffett took a position in the stock. Meanwhile, the yield is a competitive 3.2%.

General Electric (GE) is a somewhat more aggressive play than the previous stocks because the company is suffering both from the economic slowdown and the credit crunch. http://finance.yahoo.com/q/pr?s=GE Still, most value analysts think the stock is oversold for its long-term growth potential. GE is selling for just 8.3 times earnings. The stock yields 7.3%

The Bottom Line This Week

We continue to think the economy will remain weak for the first two or three quarters of the year and then slowly start to move back up. Once there are tangible signs that the outlook is improving, the stock market should start to recover from today's abysmal levels. To catch the move, you must take positions while the recession is still in place and most investors remain glued to the bench.

Some noted investors are already starting to take positions in high quality companies that should benefit greatly from an economic recovery. This week we listed eight such stocks that seem particularly likely to increase in value over the next several years.

Association of Investor Awareness - Week of 12/04/2008

Research & Editorial Staff — Thu, 04 Dec 2008 15:52:00 GMT

In This Issue

Black Friday May Suggest A More Optimistic Outlook
Most Insiders Are Not Selling
Bear Market History: How We Compare
Get Paid While You Wait
The Bottom Line This Week

Last week when everyone was stuffing themselves with turkey and other goodies, the urge to consume in abundance spilled over to Wall Street. By the time the market closed on Friday, the Dow and the Nasdaq were up an impressive 9.7% and 10.9% respectively. It was the first five day rally we've seen in over a year.

The enthusiasm for stocks wasn't completely due to holiday cheer. Investors got wind of the fact that Black Friday sales were likely to be better than was first expected. As it turned out, instead of a miniscule 0.9% sales increase, Joe and Sally MidAmerica gave the retail industry a 3% boost. Shoppers were so eager to spend money, they trampled several people who got in their way, one of whom died.

As we are sure you know by now, the enthusiasm didn't survive the weekend. The terrorist attack in Mumbai plus a dismal economic report sent the market down 680 points on Monday. Stocks recovered 442 points on Tuesday and Wednesday but the rebound seems unlikely to last very long.

Black Friday May Suggest A More Optimistic Outlook

The jury is still out regarding the significance of the unexpected spending bounce we saw last Friday. It could have been a one-day shopping spree that won't be repeated. However, the surprise increase could also indicate that Americans aren't as frightened about the future as most economists believe. If so, the economic downturn may not be as severe as the end-of-the-world pundits predict.

Critics argue that the spending boost only occurred because retailers slashed prices for popular merchandise. However, during the tough recession of the early 1980s, deep discounts had little effect on spending.

The bottom line is that consumer spending accounts for two thirds of U.S. economic growth. If the Fed can convince Americans that the outlook for our country isn't as bad as many analysts predict, it won't be.

Most Insiders Are Not Selling

It is also encouraging that most corporate insiders are refusing to sell their shares at today's prices. In Barron's this week, Michael Santoli reported that company officials "are seeing things as just plain bad" as opposed to seeing them as awful. Although "bad" is a long way from "good", the less grim outlook means that stocks may be priced properly for what is on the way. If so, the market may be closer to a bottom than the super bears are saying.

Alas, Santoli also reported that company insiders are not doing any madcap buying. If that decision also has predictive value, we should not expect a rebound anytime soon.

Bear Market History: How We Compare

In a November 30 article in Seeking Alpha, Benjamin Taylor of Brick Financial Management http://www.brickfinancial.com/ compared the current bear market to those from the past. Here is a summary of his findings:

As can be seen, the average length of the bear markets studied was 13.9 months, vs 13 months so far this time. The average decline was -31.7% vs -52% now.

Perhaps most importantly, the percent of the previous high that was recovered when the bull returned averaged 90.7%. Because the current bear market is hitting stocks harder than any of the previous nine declines, we should see a correspondingly greater rebound.

Get Paid While You Wait

Whether or not we are close to a bear market bottom, many top quality stocks are already very attractive. We continue to believe you should be nibbling at the best of them in anticipation of their eventual recovery.

Many readers who agree with our strategy are nevertheless concerned about having their money tied up for what could be an extended period while they wait for nirvana. The way to put those concerns to rest is to buy stocks that will pay you to wait for them to perform as expected. If the stocks yield more than you can earn in the fixed income market, so much the better.

Of course, dividends can be cut – and often are during economic downturns. To help insure that your yields won't go down, we think you should stick with companies that supply basic human needs that don't ride the economic cycle.

To that end, we have compiled a list of blue chip defensive stocks that supply affordable food, water, and healthcare products to people throughout the world. Each of them offers a higher yield than is available from most U.S. Treasury bonds. We think the stocks will make rewarding contributions to long-term portfolios.

ConAgra (CAG) is a packaged foods company that sells meals, snacks, and desserts throughout the world. http://finance.yahoo.com/q/bc?s=CGA Brands include Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, LaChoy, Hunts, Marie Callenders, Swiss Miss, VanCamp, and Wesson – to name only a few. The stock is down 50% from its high and currently pays 5.2%. That's a lot to like about ConAgra.

Heinz (HNZ) needs little introduction to most people who are familiar with the company's condiments, soups, sauces, beans, and other staples. http://finance.yahoo.com/q/bc?s=HNZ Although the product line is not exciting, the company's success is another matter. Heinz yields 4.3%.

Hershey (HSY) is best known for its line of chocolate products, but the company also makes many other treats. http://finance.yahoo.com/q/bc?s=HSY At first glance, it might appear that such goodies are extravagances that won't do well when the economy is contracting. However, Hershey's products are affordable treats that lift most people's spirits without picking their pockets. The company is doing well and offers a 3.3% yield.

McCormick & Company (MKC) is a 120 year old American firm that produces spices, herbs, seasonings, sauces, and flavor products to both individual consumers and major food processors. http://finance.yahoo.com/q/bc?s=MKC The company raised its dividend for over 15 consecutive years, which is an excellent track record. McCormick just raised its dividend and currently pays 3.2%.

The York Water Company (YORW) is a 192 year old company that supplies water to nearly 60,000 residential and industrial customers in Pennsylvania. http://finance.yahoo.com/q/bc?s=YORW Because the company got a start when America was still young, it was able to acquire large water resources that are now extremely valuable. Many natural resource experts think water will be in greater demand than oil within a few years. York is doing quite well already. The company raised its dividend recently and currently pays a 4.5% yield.

Eli Lilly (LLY) is a well known pharmaceutical company that sells its products worldwide. http://finance.yahoo.com/q/bc?s=LLY Although drugs are relatively insensitive to economic conditions, the stock was caught up in the broad Wall Street sell off and is down 41% from its recent high. We like the company's long-term prospects and its present 5.5% yield.

Johnson & Johnson (JNJ) needs little discussion because we featured it recently. http://finance.yahoo.com/q/bc?s=JNJ Since then JNJ announced it will buy Mentor, a leader in cosmetic surgery gear, a smart move in our opinion. Johnson & Johnson is on the S&P list of "Dividend Aristocrats" (see our November 6 issue) and currently yields 3.1%.

AT&T (T) doesn't qualify as a defensive stock, but it comes close. http://finance.yahoo.com/q/bc?s=T The company's wireless and long-distance telecom services have become so important to countless people and businesses, we have no doubt that the company will weather the economic storm and surge ahead when it ends. AT&T has gone through many severe economic cycles and helped create many family fortunes. Meanwhile, the company pays a very attractive 5.6% dividend.

The Bottom Line This Week

Jeff Kearns on Bloomberg (www.bloomberg.com) recently reported that the CBOE Volatility Index –known simply as the VIX- indicates that investors are in for at least seven more months of stomach-churning stock market swings. Although the ride won't be much fun, we are confident that investors who use the drops to buy high quality stocks will make outstanding long-term profits.

The key to success is to stick with multinational blue chips with a long history of surviving economic downturns. You can increase your odds further by selecting companies that pay attractive dividends. Many of the stocks we have been featuring in recent weeks fit the bill and should be considered top candidates for your portfolio.

Association of Investor Awareness - Week of 11/06/2008

Research & Editorial Staff — Thu, 06 Nov 2008 15:55:00 GMT

In This Issue:

The Rally May Have Legs – Or Not!
A Banquet For Value Investors
Dividends Shine In This Market
A Yield Bonus That Few Investors Consider
The Bluest Of The Blue Chips
Love Those Dividend Aristocrats
The Bottom Line This Week

The mid-cycle rebound we have been expecting showed up last week with a spectacular opening. Even though the market on Monday showed a 203 point loss, huge gains over the remaining four days pushed the Dow and the Nasdaq up 11.3% and 10.9% respectively.

This time the gains survived the weekend, but not for long. Monday was a yawn, but the market jumped 305 points on Tuesday as excitement about the presidential election boosted spirits. On Wednesday, however, America suffered a post-election hangover and stocks dropped a whopping 486 points. It looks like Wall Street plans to give President-elect Obama a very short honeymoon.

The Rally May Have Legs – Or Not!

Several analysts who read tea leaves and stock charts are convinced the signs indicate that the rally will run at least through Thanksgiving. The optimistic analysts are joined by many fundamental investors who agree that most stocks are cheaper than they have been since 2002.

We agree with both groups. However, we also continue to think that chasing this rally will prove to be a trap for the unwary. The economy is slipping even further as scared consumers refuse to spend money. Joe & Sally MidAmerica may loosen up a bit during the Holiday Season, but probably not by a lot. Without consumer support, growth can't recover.

Manufacturers, retailers, and even bingo parlors are registering the consumer strike. Automakers are taking such a beating that GM and Chrysler may merge in an effort to survive. Even if they team up, however, the companies may be like two drunks trying to hold each other up.

The good news is that fear may be a stronger emotion than greed, but it doesn't have much staying power. Americans are natural optimists who are not given to remaining down in the dumps very long. It would not take a lot of good news to turn a recession into little more than a period of very weak growth.

For the present, however, good economic news is in short supply. As a result, the stock rebound looks a lot more like a bear rally than it does the start of a new bull market.

A Banquet For Value Investors

Fortunately, the weak outlook for the economy is of little importance to long-term investors who focus on good stocks that are clearly bargains. In fact, today's lower prices can work very much to an investor's advantage. Not only do low prices boost profits down the road, they also increase the number of stocks from which to choose. The severe stock market downturn is creating a veritable cafeteria of excellent investment opportunities.

Taking a long-term view towards profits further increases your odds for success. Numerous studies show that over the long haul, stocks beat bonds, real estate, precious metals, and most other investments.

Dividends Shine In This Market

One type of stock that looks particularly good for current conditions are those which pay attractive dividends. Unfortunately, many investors dismiss dividends without looking closely at their role in boosting long-term returns. According to John Mauldin, author of the popular book Bull's Eye Investing, dividends account for about 40% of the 10% average annual gains returned by the stock market.

Focusing on dividends has another payoff as well. It automatically puts an investor in the strongest stocks that are most likely to rebound when market conditions improve. In fact, when bear markets finally turn around, value investors often see their dividend portfolios become growth stock portfolios, sometimes overnight.

A Yield Bonus That Few Investors Consider

The best dividend stocks of all are those that increase their payouts every year. Because your cost doesn't go up after you buy such stocks, your effective yield (dividend divided by price) will keep rising over time. After several years, your effective returns can be well above those paid by bonds and other fixed income investments.

A little arithmetic shows how it works. If you buy a $50 stock that pays a $1.50 annual dividend, your starting yield will be 3% - a payout that several oversold blue chips now offer.

If a year or so later the dividend rises to $2.50, your effective yield will be 5%. If the dividend eventually goes up to $4, your effective yield will be $8 - and so on. The effective yield on your $50 purchase can get pretty sweet after a few years. That's why retirees who packed their portfolios with dividend-payers aren't being hurt by the sharp interest rate declines that are hammering many of their contemporaries.

The Bluest Of The Blue Chips

In the difficult economy this year, investors might assume that few stocks qualify for S&P's list of Dividend Aristocrats. Such stocks have increased their payouts for more than 25 years. That's an amazing record since the long time period includes several tough recessions.

In fact, 60 companies are now on the list, of which 39 have already announced dividend increases in 2008. Most of the remaining 21 stocks are expected to qualify before the year ends.

A dividend increase doesn't always indicate that a company is having a good year. Some Dividend Aristocrats will dig deep into their pockets even in a slow economy because they wish to maintain their good standing with investors. This year, several banks are in that group.

However, most dividend divas cut nice checks because they are able to keep money rolling in even when times are tough. Not surprisingly, investors will bid their stock prices up even when everything else is falling.

At the Dividend Growth Investor www.dividendgrowthinvestor.com Dobromin Stoyanov identified the five best performing Aristocrats so far in 2008. They are (with their symbols and percent changes): Family Dollar Stores (FDO, 42.6%), Rohm and Haas Company (ROH, 34.8%), BB&T Corporation (BBT, 21.4%), Anheuser-Busch (BUD, 20.5%), and Wal-Mart (WMT, 19.4%). Two of the five –-Anheuser-Busch and Wal-Mart-- are companies that we have recommended in this newsletter.

Love Those Dividend Aristocrats

At this point, we are more interested in Dividend Aristocrats that have not yet performed well. Such stocks should have some catching up to do when investors decide to revalue them. The following companies in that group look especially attractive to us:

Archer Daniels Midland (ADM) is the Exxon of food, the OPEC of agriculture. http://finance.yahoo.com/q/bc?s=ADM It would be difficult to find a company better suited to succeed in today's hungry world. That doesn't mean the stock won't go down. It's well off its high right now. However, ADM should do very well longer term.

Coca-Cola (KO) may be the most recognized brand in the world. http://finance.yahoo.com/q/bc?s=KO Explorers have reported finding Coca-Cola cans in the villages of "undiscovered" tribes in New Guinea and Borneo. The company also produces juices, energy and sports drinks, teas, coffees, and bottled water – plus sweeteners and fountain syrups for retailers and restaurants. KO has a bright future.

Johnson & Johnson (JNJ) needs little introduction to our readers since we wrote about it recently. http://finance.yahoo.com/q/bc?s=JNJ The company is starting to get more press exposure as a top value stock, and may not remain cheap much longer.

Procter & Gamble (PG) is another of our favorite blue chips that is beginning to get noticed. http://finance.yahoo.com/q/bc?s=PG The company's products are not exciting but they are used worldwide by millions of increasingly affluent people in developing nations.

Walgreen Company (WAG) is starting to expand into new areas again. http://finance.yahoo.com/q/bc?s=WAG It's expensive to open new stores which hurts profits. But we think the plan will pay off, particularly when the economy begins to pick up.

The Bottom Line This Week

The stock market made some very good gains over the past ten days, which may be the start of something more significant. However, we caution readers that impressive rebounds are common even in the toughest downturns. When the rallies collapse, they do great damage to investors who followed them up.

A better plan is to focus on oversold value stocks. Those that make the S&P list of Dividend Aristocrats have especially good track records for delivering long-term gains.

Association of Investor Awareness - Week of 10/16/2008

Research & Editorial Staff — Thu, 16 Oct 2008 17:12:00 GMT

The Biggest Danger Now Is A Series Of Bear Traps
The Financial Crisis Has Further To Run
Some Bear Market Investments Have Promise
How Long The Bear Might Stick Around
A Contrary Economic Outlook
Another Shameless Plug For Blue Chip Stocks
The Bottom Line This Week

Stock volatility has become so extreme, we had to redraw the charts. Although there have been up and down days as large as those we have seen recently, never before have they come in such quick succession.

Last week, as everyone from New Guinea to New York must know by now, the Dow and the Nasdaq fell 18.2% and 15.3% respectively. That would have been tough enough by itself, but what made the week even more hectic is it contained a 679 point jump that many investors believed was the start of a reversal.

The market leaped forward again this Monday with a breath taking 936 point surge when U.S and European leaders decided on a coordinated financial rescue plan. Stocks took a breather on Tuesday. Then it plunged 733 points the next day on poor consumer spending data. We must expect more whiplash days as the credit crisis continues to unfold.

The Biggest Danger Now Is A Series Of Bear Traps

Although big market swings aren't much fun, they do show that investors are reluctant to quit the game. As we mentioned last week, however, bear markets rarely hit bottom until investors become so discouraged that they want nothing more to do with stocks. Until then, rebounds are likely to be traps for the unwary. Only when rallies become rare, can we begin to feel confident that the bear market has run its course.

The Financial Crisis Has Further To Run

The biggest reason we are not expecting a sustained stock market recovery any time soon is the credit crisis is far from over. Even with the billions (and possibly trillions) of dollars the government plans to inject into the financial service system, a turnaround will take months. In the meantime, more banks, S&L's, and hedge funds are likely to fail. The losses will almost certainly kill any stock rebounds that may get started.

The best strategy to use in a bear market is to buy high value stocks when the market is falling, and sell any lower value stocks when it is rallying. That way, when the bear cycle finally comes to an end, your portfolio will be heavily weighted with stocks that are likely to perform well during the next expansion.

Some Bear Market Investments Have Promise

More aggressive investors can also find profits while the market is dropping. Selling stocks or ETF's short is one way to go, but the strategy is risky. If the market goes up rather than down --and it gets away from you-- losses can be very high. If you do make short sales, you must be certain to protect your positions with stop-loss orders.

For most investors, the safest way to dance with the bear is with a fund that is structured to move contrary to the S&P 500 index. We think the most attractive is the Rydex Inverse S&P 500 Strategy Fund (RYURX) http://finance.yahoo.com/q/pr?s=RYURX . When Wall Street sinks, the Inverse S&P Fund will make you smile.

The ProFunds UltraBear Fund (URPIX) is equally broad in scope as the Inverse S&P Fund, but it is much more aggressive. http://finance.yahoo.com/q/pr?s=URPIX UltraBear also acts contrary to the S&P 500 - but it seeks to double the size of the moves. The fund uses the same investment vehicles as its more conservative cousin, but it purchases more of everything to gain extra leverage. Of course, the lever swings both ways: The UltraBear fund will decline quickly if the S&P 500 index rises. Neither of the Rydex funds charge a load.

The best strategy to use with a bear market fund is to buy it during the first big rally and hold it for the duration of the downturn. Trying to jump in and out of the fund with each market change is rarely successful. Staying with the dominant trend almost always pays the greatest rewards.

How Long The Bear Might Stick Around

As we said earlier, we doubt that the bear market will be going away anytime soon. But just how long might it be before the bull returns? More importantly, how long is it likely to take before the bull replaces the bear's losses?

In an attempt to shed some light on the subject, value investor Ali Khan took a look at the four biggest bear markets we had over the past 30 years. www.investmentplayground.net We put his research into a table that shows what we might expect from the current tug of war between the bear and the bull.

Bear Market	Duration	Percent Decline	Time To A Full Recovery
Jan 1973 - Oct 1974	21 months	57%	3.5 years
Aug 1987 - Dec 1987	105 days	35%	21 months
9/11 Terror Attack	28 days	21%	105 days
Mar 2002 - Sep 2002	173 days	29%	15 months
Average of first 4	234 days	35.5%	20 months
Oct 2007 - ?	264 days so far	40% so far	?

As you can see, the current bear market has already lasted 30 days longer and has fallen 4.5% deeper than the average. However, the crisis that triggered the current downturn was far greater in monetary terms than the previous four. It is most comparable to the severe bear market of 1973-74 when the market dropped 57%. If we see a repeat of that tough downturn, stocks will drop another 17%.

Of course, history rarely repeats itself. However, as Mark Twain observed, it often rhymes.

A Contrary Economic Outlook

You may recall that on several occasions during the past year we remarked that the economy was doing better than analysts expected. Even during the third quarter, when a recession was a forgone conclusion by nearly everyone, we noted that mainstream America was actually doing fairly well.

A few days ago, Casey B. Mulligan, a professor of economics at the University of Chicago, made a similar observation when he said, "...the economy doesn't really need saving. It's stronger than we think."

Prof. Mulligan made the case that "The non-financial sectors of our economy won't suffer much from even a prolonged banking crisis, because the general economic importance of banks has been highly exaggerated." He pointed out that pension funds, university endowments, venture capitalists, and corporations also provide large sums of money to businesses.

In addition, the average corporation gets about 25% of the funds it needs from its own cash reserves. If necessary, companies could get as much as three times that amount by cutting their dividends.

The professor also pointed out that banking services aren't about to vanish. To be sure, some banks are failing - but others are taking their places. If the survivors don't loan money, they won't last very long themselves. In any event, most businesses won't be hurt if the credit freeze lasts for a few quarters.

We think Dr. Mulligan is correct about the economy. His outlook certainly fits the pattern we have been seeing ourselves. If his prediction is correct, the stock market rebound could come a lot sooner than almost anyone expects.

Another Shameless Plug For Blue Chip Stocks

Whenever good times return, we are confident that the blue chips we have been recommending will be at the head of the Wall Street parade. As we have been reporting throughout this difficult period, many of our leading stocks are already doing better than expected.

Three of our companies that surprised investors over the past few days were General Electric (GE), Intel (INTC) and IBM. GE's profits fell 22% but they were above expectations. Intel turned in a 12% profit jump. IBM also said it will soon report an earnings increase.

But, as we mentioned earlier, wait to buy until rallies collapse and prices drop from the bargain basement to the liquidation table.

The Bottom Line This Week

Although the economy appears to be doing better than is generally believed, a recession seems likely that may last into the first quarter of 2009, and possibly further.

Rather than grumble about the slowdown, we think investors should use it to their advantage. Bear market funds such as the Rydex Inverse S&P 500 Strategy Fund look good for the near and medium terms. When their time at bat ends, many multinational blue chips are likely to score home runs.

Week of 10/02/2008

Research & Editorial Staff — Thu, 02 Oct 2008 16:38:00 GMT

A Nasty, But Not A Calamitous, Stock Plunge
Our Contrary Opinion
A Cure For The Crisis Is Already Being Applied
It's Time To Do Some Cautious Buying
Stock Buyers Should Sip, Not Gulp
The Bottom Line This Week

People who enjoy excitement must envy investors right now. Not even thrill seekers who travel to New Zealand for the world's highest bungee jump have anything on us. When it comes to big bounces, Wall Street is the place to be.

On Monday of this week, we completed the jumping part of the stock market's bungee experience. The rebound on Tuesday was nearly as exhilarating. Wednesday, thank goodness, was a quiet day of recuperation.

Of course the rubber cord could break at any time, in which case the game will be over. However, that seems very unlikely. If a crash was in the works, we think it would have happened on Monday when deep pessimism was rampant.

The market action we are having now is all the more exciting because there was no hint of it last week. The Dow dropped a tepid 2.2% while the Nasdaq just about doubled it with a 4.0% decline. It was barely enough to be a good warm-up for this week's main event.

A Nasty, But Not A Calamitous, Stock Plunge

On Monday, as everyone must know by now, the Dow and the Nasdaq plummeted 778 points and 200 points respectively. Pundits, of course, were quick to point out that the Dow's move was the "biggest stock plunge in history!"

That's true, but as Paul Harvey liked to say, "Heeeeere's the rest of the story:"

In percentage terms the Dow's plunge represented just under a 7% drop. By contrast, the Dow fell 23% on October 19, 1987, which was over three times the size of the hiccup we had this week.

Pundits also gleefully point out that the drop erased all the gains stocks made in the past eight years. Well, that's also true. However, eight years ago was the top of the tech and dot-com bubbles, which was hardly a proper place to begin a measurement. If we start from the market's bottom after the bubbles burst, stocks are up nearly 40%, plunge and all.

Our Contrary Opinion

Many articles about the financial crisis predict it will lead to a near-total meltdown of the U.S. economy. Credit will be unavailable, business will grind to a halt, consumers will stop spending money, and civilization as we know it will end. It's about the darkest outlook possible.

For such a scenario, the Monday-Tuesday stock decline seems mild. If the world is really in as much trouble as so many dire projections suggest, a much larger drop would have been likely. Either the outlook for the economy isn't anywhere near as bad as many writers believe, or investors don't understand the gravity of the problem.

We doubt the latter is the case. On the contrary, history shows that investors have a much better grasp of the future than professionals. That's not surprising because investors put money on their predictions, which tends to focus the mind.

Lastly, if we look at the market action on Monday and Tuesday together, we have another reason not to take poison. Our arithmetic shows the 778 point drop and the 485 point rebound left us with a 293 point decline, which was far from a disaster.

A Cure For The Crisis Is Already Being Applied

We are not in any way suggesting that the financial turmoil isn't serious. It is the most threatening event we have seen in many years. But we think Congress and market forces will restructure our financial system without killing the American dream.

In fact, the process has already started. In January, the Fed arranged for Bank of America to acquire Countrywide. Six months later BOA took over Merrill Lynch. In March, JP Morgan Chase was persuaded to rescue Bear Stearns.

Earlier this month, Uncle Ben Bernanke also paired JP Morgan Chase with Washington Mutual. On Monday of this week, Citigroup took over Wachovia. More "strategic alliances" are undoubtedly on the way, particularly with regional banks that are also having liquidity problems.

Even before the financial crisis hit, banking insiders predicted that a wave of consolidation was on the way. Guess who was expected to lead the charge? The list was headed by none other than Bank of America, JP Morgan Chase, and Citigroup. Recent events simply appear to have accelerated the buyout cycle. It also gave the buyers much better prices.

It's Time To Do Some Cautious Buying

Speaking of better prices, the best time to buy stocks is when everybody else wants to sell them. As uber-investor Warren Buffett once said, "We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful." He went on to say, "You must have a willingness to do something when everyone else is petrified. You must learn the lesson of following logic over emotion."

With the advice of "The Sage Of Omaha" in mind, we suggest that you consider the following blood-in-the-streets investments:

Financial Services

The low prices the large financial service firms paid for their acquisitions should lead to king-sized profits once the current troubles are over. But, with the financial crisis dominating the headlines, the leading bank companies are currently dirt cheap.

As a result, we are even more bullish on the long-term outlook for the Fidelity Select Financial Services Fund (FIDSX). http://finance.yahoo.com/q/bc?s=FIDSX Remember, this is a managed fund, which means its portfolio will hone in on the winners as they emerge. The fund already holds substantial positions in Morgan Stanley, JP Morgan Chase, Bank of America, and Citigroup. All of them are in the Wall Street doghouse because they also purchased many bad mortgages and ran into trouble. But the surviving banks are now starting to make up for their mistakes.

The Fidelity fund is down 46.5% from its October 2007 high, and it is off 26.2% this year. We think the steep discount makes the fund attractive for long-term portfolios. It should be a particularly good performer in retirement accounts.

Bond Funds

Bond funds also look good. On Monday, market psychologist Brett Steenbarger of TraderFeed (www.traderfeed.blogspot.com) pointed out that the iShares Investment Grade Corporate Bond Fund (LQD) lost 20% of its value over the past three weeks. http://finance.yahoo.com/q/bc?s=LQD Investors are worried that the companies whose bonds are in the fund will not be able to make their interest payments. We think that threat is greatly overstated for investment grade bonds.

To see how irrational bond fears have become, the iShares High Yield Corporate Bond Fund (HYG) is also down 20%. It's ridiculous to price the two very different classes of bonds the same way. It's all the more reason to think the investment grade fund is a classic case of the baby being thrown out with the bathwater.

Multinational Blue Chips

We will also repeat our recommendation of the iShares Dow Jones Select Dividend Index (DVY) that tracks the 100 highest-yielding stocks in the Dow Jones Total Market Index. http://finance.yahoo.com/q/bc?s=DVY&t=1y

When investors start to tiptoe back into the market following a scare, the first place they go is to high-yielding blue chip stocks. As a result, big stocks should be especially good performers at the same time they offer investors a high degree of safety.

Stock Buyers Should Sip, Not Gulp

If you decide to do some cautious bottom fishing, please proceed slowly. The financial crisis is far from over. We may see several more scares in the coming weeks. If you hold some cash back from your first venture into the market, you may see even better prices later on.

In any event, the best investment strategy during times of great turmoil is to buy a little bit after every significant market decline. That will leave your ultimate returns far higher than will be true for people who chase the rallies.

The Bottom Line This Week

The past three weeks have not been much fun. However, Mother Market has a way of rewarding investors who stick with her system over the long term. The greatest returns go to people who find the courage to buy stocks when they are out of favor and they are the least expensive, as is the case today.

Three investments that currently look very attractive are the Fidelity Select Financial Services Fund, the iShares Investment Grade Corporate Bond Fund, and the iShares Dow Jones Select Dividend Index. All of them have been top performers in the past, and they will almost certainly be top performers in the future.

AIA Advocate for Absolute Returns : Blue Chips

Association of Investor Awareness - Week of 07/30/2009

Stocks Got A Second Wind In July

But, How Long Will It Last?

Technology Appears To Be Turning Around

Blue Chips Top The Best Sellers Chart

The Economy Looks Better, But Not Great

Asia's Growth Is Much Stronger

A Single Stock Covers China And Its Neighbors

The Bottom Line This Week

Until Next Week

Association of Investor Awareness - Week of 02/26/2009

The Federal Bailout Is A Mixed Bag Capitulation May Have Been Reached Some Blue Chip Stocks Will Win Blue Ribbons A Speculation Is Also Attractive Gold Regains Its Appeal, But There Are Problems An Economic Indicator That We Can Love The Bottom Line This Week

The Federal Bailout Is A Mixed Bag

Capitulation May Have Been Reached

Some Blue Chip Stocks Will Win Blue Ribbons

A Speculation Is Also Attractive

Gold Regains Its Appeal, But There Are Problems

An Economic Indicator That We Can Love

The Bottom Line This Week

Association of Investor Awareness - Week of 01/08/2009

It's Time To Start Looking Beyond Current Woes A Big Cash Horde Is Always Bullish When It Comes To Rebounds, Too Early Beats Too Late Eight Blue Chips Many Pros Are Buying The Bottom Line This Week

It's Time To Start Looking Beyond Current Woes

A Big Cash Horde Is Always Bullish

When It Comes To Rebounds, Too Early Beats Too Late

Eight Blue Chips Many Pros Are Buying

The Bottom Line This Week

Association of Investor Awareness - Week of 12/04/2008

Black Friday May Suggest A More Optimistic OutlookMost Insiders Are Not SellingBear Market History: How We CompareGet Paid While You WaitThe Bottom Line This Week

Black Friday May Suggest A More Optimistic Outlook

Most Insiders Are Not Selling

Bear Market History: How We Compare

Get Paid While You Wait

The Bottom Line This Week

Association of Investor Awareness - Week of 11/06/2008

The Rally May Have Legs – Or Not!A Banquet For Value InvestorsDividends Shine In This MarketA Yield Bonus That Few Investors ConsiderThe Bluest Of The Blue ChipsLove Those Dividend AristocratsThe Bottom Line This Week

The Rally May Have Legs – Or Not!

A Banquet For Value Investors

Dividends Shine In This Market

A Yield Bonus That Few Investors Consider

The Bluest Of The Blue Chips

Love Those Dividend Aristocrats

The Bottom Line This Week

Association of Investor Awareness - Week of 10/16/2008

The Biggest Danger Now Is A Series Of Bear TrapsThe Financial Crisis Has Further To RunSome Bear Market Investments Have PromiseHow Long The Bear Might Stick AroundA Contrary Economic OutlookAnother Shameless Plug For Blue Chip StocksThe Bottom Line This Week

The Biggest Danger Now Is A Series Of Bear Traps

The Financial Crisis Has Further To Run

Some Bear Market Investments Have Promise

How Long The Bear Might Stick Around

A Contrary Economic Outlook

Another Shameless Plug For Blue Chip Stocks

The Bottom Line This Week

Week of 10/02/2008

A Nasty, But Not A Calamitous, Stock PlungeOur Contrary OpinionA Cure For The Crisis Is Already Being AppliedIt's Time To Do Some Cautious BuyingStock Buyers Should Sip, Not GulpThe Bottom Line This Week

A Nasty, But Not A Calamitous, Stock Plunge

Our Contrary Opinion

A Cure For The Crisis Is Already Being Applied

It's Time To Do Some Cautious Buying

Stock Buyers Should Sip, Not Gulp

The Bottom Line This Week

The Federal Bailout Is A Mixed Bag
Capitulation May Have Been Reached
Some Blue Chip Stocks Will Win Blue Ribbons
A Speculation Is Also Attractive
Gold Regains Its Appeal, But There Are Problems
An Economic Indicator That We Can Love
The Bottom Line This Week

It's Time To Start Looking Beyond Current Woes
A Big Cash Horde Is Always Bullish
When It Comes To Rebounds, Too Early Beats Too Late
Eight Blue Chips Many Pros Are Buying
The Bottom Line This Week

Black Friday May Suggest A More Optimistic Outlook
Most Insiders Are Not Selling
Bear Market History: How We Compare
Get Paid While You Wait
The Bottom Line This Week

The Rally May Have Legs – Or Not!
A Banquet For Value Investors
Dividends Shine In This Market
A Yield Bonus That Few Investors Consider
The Bluest Of The Blue Chips
Love Those Dividend Aristocrats
The Bottom Line This Week

The Biggest Danger Now Is A Series Of Bear Traps
The Financial Crisis Has Further To Run
Some Bear Market Investments Have Promise
How Long The Bear Might Stick Around
A Contrary Economic Outlook
Another Shameless Plug For Blue Chip Stocks
The Bottom Line This Week

A Nasty, But Not A Calamitous, Stock Plunge
Our Contrary Opinion
A Cure For The Crisis Is Already Being Applied
It's Time To Do Some Cautious Buying
Stock Buyers Should Sip, Not Gulp
The Bottom Line This Week