The Bulls are having a field day… if the Dow closes up today I think that would make 22 out of the last 25 trading days up, and the S&P is setting a new high. I think my “more conservative” portfolio is hanging in there, since I have enough stock exposure with Vanguard Primecap (VPMCX) and Vanguard Wellington (VWELX). I still like where I am as a balanced approach.  I’ve been looking hard at various stocks to find some good dividend payers with low multiples, low debt and solid earnings. Hmmm… haven’t we all!  I like the strength of Altria (MO) and found an entry point last week, as well as Pfizer (PFE). Altria will be a long position for the dividen return. Pfizer is a tough call, but I think the valuation is attractive as well as the dividend return at this point. The pharmaceuticals have some issues over the next 5 years as several key patented drugs are due to expire and face potentially heavy generic competition. But Pfizer has been a laggard for over a year now and may find some room to grow. With better than a 4% yield and 27 Billion in cash I think they can continue growing earnings and the product line.Â
But I’m still looking for a pretty strong pullback in the market. Energy prices are hitting the pocketbook pretty hard right now, with little change in the near-term forecast. Some of the experts explain that energy, more specifically gasoline and fuel purchases, are a much smaller part of the household budget today as opposed to 30 years ago. That may be true, but it doesn’t change the fact that consumers must pay more and more each day just to get around. I think we also commute a lot further and more frequently these days.  My informal “Gripe Ratio” based on the negative voices heard at the pump are increasingly loud, and I’m seeing a few new bumper stickers not so politely talking about gas prices.  Those costs are going to continue creeping into the economy and we’ll see it at the grocery store. And how about that summer tourism? Lots more folks will be traveling locally I suspect.  The consumer spending numbers will be interesting this year, and I’ll be curious about the inflation numbers in the 2-3 quarters ahead. But you have to acknowledge the strength of earnings so far. If I was a trader however, I think I’d be taking some profits pretty soon.
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