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DiviMo
P&P Score: 4.54   Points: -40.46   Accuracy: 59.17%   Average Pick Score: -0.45   Annual Return: -11.12% (-11.30% since 5/20/11)  

DiviMo's Blog : Three 'safe' DOW stocks to buy for the long term

Date August 13, 2011  Edited: August 13, 2011    Comments Comments (10)    Rate this post Recommend This Post (817)   
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23 of the 30 DOW stocks  were down last week.  Three stocks that were up this week have also been up for the year. The criteria for this 'safe' list is as follows:



  • Showing strength during the current market volatility

  • Showing strength for the current year

  • Provides income via dividend payments

  • Long history of paying dividends and increasing yields

  • Did not drop more than 25% during last bear market

  • Recovered fully during the bull market

  • A market leader


1. MCDONALDS (MCD)


Up 1.42 points last week. Up over 10% for the year. Has paid dividend for 36 years and 34 straight years of dividend increases. MCD actually increased in value during bear year 2008. It is about 27 points higher now than it's closed in 2008.  Leader in it's field.


2. COCA COLA (KO)


Up 0.37 for the week. Up for the year. Has paid  dividends since 1893 with 48 straight years of yield increases.  Lost 23.75% during bear year 2008. Recovered all and then added some 20 more points during the bull market. Leader in it's field.


3. JOHNSON & JOHNSON (JNJ)


Up 1.04 points for the week. Up for the year. Has paid dividends for 67 years with 48 years consecutive dividend increases. Lost 6.62% during bear year 2008. Recovered all and then some during the bull market. One of the leading companies in healhcare.


Disclosure. Own MCD

Tags : JNJ   MCD   KO  

10 Comment(s):

Author rjm77me     Date August 13, 2011 11:44 Abuse this post Report Abuse
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Those are safer bets in todays market. One can use 25% of money in other great stocks which have seen higher decline. Those are the one which will show higher %ge gain.
Putting new money to work is always tricks in the market data based on last 15 days.
A limited number of machine gun runners have taken over the market and no one can do any thing about it. It a free world where few hold the market hostage. 50 point drop or gain in 5 minutes - fairy tail - not any more
Author DiviMo     Date August 13, 2011 23:27 Abuse this post Report Abuse
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Thanks rjm77me...agree, good analysis.
Author JaiH     Date August 14, 2011 12:25 Abuse this post Report Abuse
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All three stocks in a confirmed downtrend, so why buy them now. If they go down 25% each, that is a lot of money.
Author rjm77me     Date August 14, 2011 13:28 Abuse this post Report Abuse
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JaiH,
As long one has conviction and a trade plan, one is always right.
One can test a pick using paper money on this site.
JUST ADD TO YOUR PORTFOLIO. As you say 50% chance of being wrong.or right
Stock market and charts are broken after 3 weeks of hard selling
Author JaiH     Date August 14, 2011 13:46 Abuse this post Report Abuse
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rjm
JNJ was trading at 60, 2 years ago, now it is 63. It pays a 3.5% dividend. So what is the big deal about owning this POS. It is touted by a lot of people, but I don't see a reason to own it. You better off buying NLY or something else.
Author rjm77me     Date August 14, 2011 14:07 Abuse this post Report Abuse
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I agree when you said stocks are in down trend and why buy.

Part of your account WITH 5% safe return is better than a wild ride. folks buy treasuries every day for a lesser return.
NLY is a decent play and like it
One still need to diversify. one can trade JNJ with option to enhance return or just option alone - multiple choice with any of 7000 plus stock choices.
Every one is right when they buy or sell. Why is some one selling and at the same time some one thinks it is great time to buy
Author rjm77me     Date August 14, 2011 14:12  Edited: August 14, 2011 by rjm77me Abuse this post Report Abuse
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Normally I do not like to offer an opinion to some one picks for one reason - I do not know the risk level and why one is investing in a given stock.
One may aim for 1% a month return like Warren Buffet on long term basis OR put every chip on a few stocks to win big. Mr Buffett probably own all the three stocks mentioned above - so we going to tell him to SELL?

When I pick some thing - market quickly tells me about being right or wrong
Author rjm77me     Date August 14, 2011 14:23 Abuse this post Report Abuse
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IT IS GREAT TIME TO SELL LONG TERM OPTION ON STOCKS ONE LIKE TO HOLD (higher volty means higher option price)- IF MARKET GOES UP STOCK MAY BE TAKEN AWAY OR ONE BUFFERS THE LOSS WITH MONEY FROM SELLING A CALL.
Mr Buffet sells options all the time for part of his portfolio.. These are huge bets and are two to 5 years down the road.
I always hedge part of my IRA by selling call option - some times it hurts
Author rjm77me     Date August 14, 2011 14:27  Edited: August 14, 2011 by rjm77me Abuse this post Report Abuse
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I bought CSX in my IRA and sold a call - stock went down - I bought the call back and sold a lower strike option. So my net loss is 2% instead of 6%
I may look like a a stupid to some and so be it. It is like buying an apartment building which I bought for monthly rent collection. The property changes price every month up or down.
If my stock gets taken away I end up with 1% loss or break even. Or i buy back and sell another call for next month or two months down the road.
I just monitor like with the apartment building and go to collect rent once a month
Author DiviMo     Date August 16, 2011 11:11 Abuse this post Report Abuse
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Would like to thank Zack's for putting divimo's blogs as 'voice of the people' highlights'. It provides more exposure to a bigger audience and encourages me to continue to blog on this site.

regards MO
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