{"id":29041,"date":"2012-04-13T13:00:02","date_gmt":"2012-04-13T17:00:02","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/04\/time-to-go-bargain-hunting\/"},"modified":"2012-04-13T13:00:02","modified_gmt":"2012-04-13T17:00:02","slug":"time-to-go-bargain-hunting","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/04\/13\/time-to-go-bargain-hunting\/","title":{"rendered":"Time to go Bargain Hunting"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

\"\"<\/a>With volatility erupting out of Europe again, investors are left to wonder: Is this an opportunity to buy at attractive prices all of those great stocks that \u201cgot away from you\u201d in the first quarter run-up, or is it portent of nasty things to come?<\/p>\n

It would appear to be a little of both.<\/p>\n

Even before the five-day selling spree, stocks were reasonably priced compared to historical measures, and they were downright cheap when compared to bonds and other common asset classes.\u00a0 When you combine this with the generally gloomy sentiment towards stocks that has persisted for much of the past year, your risk of significant loss in a high-quality stock portfolio is almost nil.<\/p>\n

Can stocks go from cheap to cheaper?\u00a0 Absolutely.\u00a0 It happens all the time.\u00a0 But the conditions for a real bear market are simply not in place.\u00a0 Fed policy remains loose, inflation remains largely tame, and stocks are cheap and underowned by individual investors and professionals alike.\u00a0 These would be the conditions I would look for in a new bull market, not a bear market.<\/p>\n

Still, after rising 28 percent from the 2011 Euro-crisis lows, stocks were due for a breather.\u00a0 After returning 12 percent in the first quarter, the S&P 500 had already exceeded the returns that most analysts expected for the entire year.<\/p>\n

This is where that \u201cnasty portent of things to come\u201d comes into play.\u00a0 To borrow a quote from Lord Byron, it appears that the equity markets have \u201csquandered their whole summer while \u2019twas May,\u201d or more accurately April in this case.\u00a0 \u00a0\u00a0As a result, I expect the major indices to move sideways in a choppy, range-bound market for most of the second quarter or until the latest scare coming out of Europe subsides.<\/p>\n

Given this, how are investors to position their portfolios?<\/p>\n

In a range-bound market, you can make money in one of two ways.\u00a0\u00a0 You either actively trade, attempting to buy at short-term lows and sell at short-term highs.\u00a0 Or, you can orient your portfolio towards dividend-paying sectors and simply collect your checks while waiting for prices to firm up.\u00a0\u00a0 For the bulk of your nest egg, it is this second course of action I would recommend.\u00a0\u00a0 This is the approach I have taken in my Tactical ETF Portfolio<\/a> in holding the Wisdom Tree Large Cap Growth ETF (NYSE: $<\/span>DLN<\/a>)<\/strong> and the PowerShares International Dividend Achievers ETF (NYSE:$<\/span>PID<\/a>)<\/strong>.<\/p>\n

For more active trading, investors might consider a contrarian bet on Spain.\u00a0 I wrote favorably about Spain at the beginning of the quarter (see \u201cEurozone Member to Watch: Spain<\/a>\u201d), and I would reiterate this view today.\u00a0 Spain has some of the cheapest stock prices and highest dividend yields in the world today, and Spanish firms outside of the construction sector tend to get a significant percentage of their revenues from outside the crisis-wracked country.<\/p>\n

Keep the faith, dear reader.\u00a0 There is money to be made in this market.<\/p>\n

This article first appeared on MarketWatch.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By The Sizemore Letter With volatility erupting out of Europe again, investors are left to wonder: Is this an opportunity to buy at attractive prices all of those great stocks that \u201cgot away from you\u201d in the first quarter run-up, or is it portent of nasty things to come? It would appear to be a … <\/p>\n

Continue reading “Time to go Bargain Hunting”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-29041","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=29041"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29041\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=29041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=29041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=29041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}