Are Stocks On Sale?

Right Now May Be A Good Time To Buy Stocks On Clearance

It’s only the end of January, but it’s been a long month for the stock market.  Posting its worst start to a new year ever, the market has tumbled with a quickness that has left most investors nervous and rattled.  Fears of what’s happening in China and oil to going to zero are keeping people up at night.  I understand investor sentiment and definitely empathize with those people and clients who are concerned.

However, I think that there is light at the tunnel, and the reality may be that certain stocks are on a bit of a clearance sale.  Two examples that come to mind are Wal-Mart (WMT) and McDonalds (MCD).  

Wal-Mart was the worst performer of the Dow (Dow Jones Industrial Average) in 2015.  The Dow, as you probably know, is the oldest, best known, and most followed of the major stock market indices. It is comprised solely of 30 large-cap companies that represent a huge array of American business.  So back to Wal-Mart.  WMT was the worst performer of the Dow in 2015, and now WMT is the only Dow stock higher for the year.  At the end of 2015 most people would have stayed away from this stock, but had they bought it, WMT might be the only stock in the “green” their portfolio.  

While we can’t always predict the movement of a particular stock, one thing WMT has going for it is the dividend.  WMT has a dividend yield of 3% which means that whether the stock goes up or down, shareholders are getting paid.

  It has also raised it’s dividend 62% since 2010.

While McDonalds hasn’t seen quite the upswing, next to WMT it’s the Dow stock that’s doing the best. Again, stock price aside, MCD also pays a dividend which continues to put money in the shareholders pocket.

Are you willing to invest in that stocks that are currently in the red?

 When making your investment decisions, don't forget the famous investing adage "buy low, sell high."    

There is also a basic case to be made for buying quality stocks during times of market uncertainty. Owning quality, income-producing stocks- despite the fact that they have gone lower- should you give the resolve to remain calm. This isn’t to say that your portfolio value won’t fluctuate, but quality has weathered every storm.

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Disclosure:  Wes Moss is a partner at Capital Investment Advisors and Wela. This information is provided to you as a resource for informational purposes only.  It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors.  Past performance is not indicative of future results.  Investing involves risk including the possible loss of principal.

  This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.