It's nice when all your stocks are going up and up and up again. Each day brings a new high in the markets and an increase in your portfolio. It's a nice feeling. You're well on your way in obtaining that financial freedom and security you've always wanted. But you're not quite there yet.
Those stocks you bought when they were cheap are now suddenly expensive, and the other stocks you're following are also getting expensive. So what do you do with any new money that becomes available? I maintain my standards and invest only in those companies that increase their dividends and have an estimated total return of over 10% during the next year. That means my pool of available candidates starts to get slimmer and slimmer. As the market continues to rise, this pool continues to shrink.
Of the 70 companies or so that I track on a daily basis, I'm now down to eleven companies that fit my criteria. Below is a list of those companies and they're the companies whose securities I will be buying in the days and weeks ahead (as long as they continue to fit my criteria).
Those stocks you bought when they were cheap are now suddenly expensive, and the other stocks you're following are also getting expensive. So what do you do with any new money that becomes available? I maintain my standards and invest only in those companies that increase their dividends and have an estimated total return of over 10% during the next year. That means my pool of available candidates starts to get slimmer and slimmer. As the market continues to rise, this pool continues to shrink.
Of the 70 companies or so that I track on a daily basis, I'm now down to eleven companies that fit my criteria. Below is a list of those companies and they're the companies whose securities I will be buying in the days and weeks ahead (as long as they continue to fit my criteria).
| Company Las Vegas Sands ABM Chevron Flowers Foods Comcast Dover General Electric Aflac Ecolab Ford Motors Emerson Electric | 1 yr Cap Gain 24.22% 17.56% 15.68% 13.78% 14.17% 13.34% 11.81% 11.69% 11.72% 8.86% 8.22% | Dividend Yield 3.39% 2.28% 3.81% 2.79% 1.60% 2.11% 3.37% 2.62% 1.00% 3.16% 2.91% | Total 1yr Return 27.61% 19.84% 19.49% 16.57% 15.77% 15.45% 15.18% 14.32% 12.73% 12.02% 11.14% |
While I'm not the smartest guy I know and my list isn't as exhaustive as other's, it does provide me with some interesting information. When my list of stocks that fit my criteria begins to contract, I begin to realize that there are fewer and fewer companies currently worth investing in. That's usually because the companies on my list are overbought and overpriced. To me that also implies that the whole market is starting to be overbought and overpriced and its time to become conservative.
Other investors that invest similarly also recognize this concept and they also end up investing in fewer and fewer stocks. When that happens, the market is topping. And when the buyers stop buying, the sellers start to take control of the market.
Other investors that invest similarly also recognize this concept and they also end up investing in fewer and fewer stocks. When that happens, the market is topping. And when the buyers stop buying, the sellers start to take control of the market.
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