It’s about time for the markets to show strength on their own merits.
Some smaller pullbacks now are better than another much larger crash later in the year. Consider the pullbacks now as a good opportunity to sell some positions where the current price is high compare to the value of the business and make some buys of stocks that are selling at a discount.
There’s usually always some good deals in the market and they often become better deals when the overall market is going down hard. Make of list of companies that look attractive and judge them based on their current and future business prospects compared to the current price.
I’ve already started too and plan to buy more if prices continue to go down more.
If you’re still nervous, consider investing in solid companies with reliable dividends. For example, I like Merchant’s Bank (MBVT) with an over 4% dividend. They are rock solid and have consistently paid a dividend for years. Worst case scenario the stock plummets and I still get my 4% on my original investment and plus I get to buy more for a larger dividend.
Other stocks with decent dividends are Intel (INTC), Cisco (CSCO), Microsoft (MSFT) and GE (GE). All of which I have current long positions in.
Merchant’s Bank (MBVT) has done very well over the last 3 months. I believe it’s time to take some profits. I sold a sizeable portion of my position in Merchant’s today, most of which I purchased back in early 2011, making a gain of about 65%, not counting dividend revenue which has been around 4% up until recently.
I sold about 1/3 of our position in Merchant’s but would be willing to buy it back at a lower price, which will most likely happen in the near term. I would look for a target price of $28 or less.
My feeling on Merchant’s are still quite positive, but I just believe the price is getting a little high and I believe that it will be lower soon. Even though I sold half of my position, Merchant’s is still my largest position in our portfolio.
Merchant’s Bank (MBVT) has recovered from a recent sell off.
Since I bought the additional shares with the whole intention of selling once the share price recovered I sold some of those shares today for a quick 4.49% gain and will most likely buy again if the the price drops significantly again.
Again, I am still keeping the bulk of my position, which is still my largest position.