2009-04-28

Funny Feeling...

Okay is anyone else getting a funny feeling about the markets right now. My investments have grown and now stablized for around a week now and it has interest me greatly. Mostly due to the fact that I am extremely sceptic about the market.

It is summer right now, and if consumers are going to buy anything, now is the time. Why do I say that? Traditionally most manufacturing occurs from the March to October time periods due to consumer spending increases. Stuff like lawn mowers, plant seed, bicycles, 2x4's, etc all start selling when the weather gets nice. So even in this bad economy, stuff will sell when the sun comes out. Money starts getting recorded and quarterly reports are reported, investors get jumpy and want back in. Which prices were so low, it wasn't a bad decision to make. A decision that I wish I had an option for.

Here is the thing. Manufacturing is still in the toilet. Every major production facility that I have contacts with are still running on fumes, bairly making anything. Which makes you wonder, why are stock prices going up? I understand a stabilizing in the market and am happy to see it, I just don't know if I believe that the market is truely stable.

My one buying idea is VIG, also known as Vanguard Dividend Acheiver's ETF. Essentially it is an ETF that covers constant dividend acheiving stocks. What is important to note is that it holds barely any banks and is mostly made of good companies that happen to pay a healthy dividend (don't believe me check for yourself here). It is also a Vanguard product so there is little in the way of fees and could potentially be a long term consistant dividend return product (currently ~3%) that could also grow in value over the long term. I am watching this ETF closely as I am looking to switch investing companies so that I can go with a service that does free automatic dividend reinvestment. I haven't decided a price point but will you all know when I do think it is a buy.

2 comments:

Guzzo said...

My one buying idea is VIGThat's funny. Where I come from we usually pay the VIG.

All kidding aside, You can't go wrong with Vanguard, and I think VIG is a very good ETF to buy and hold. I've always kept my eye on Vanguard's High Dividend Yield Index Fund too.

Vanguard is creating their own brokerage firm next month, so I'm looking forward to changes for the better (services, costs, etc.) too.

Good luck to you!

MJ @ Dyslexic Research said...

VTV also looks pretty good right now. Dividend just below 5%.