Navigating an Overvalued Market, Part 3
In my previous two columns, I discussed why I believe the market is overdue for a pullback and how I am positioning my portfolio for that event. I don't believe we are due for more than a 5% to 8% selloff, and the S&P 500 and Dow Jones Industrial Average might even reach all-time highs before experiencing this decline. But I believe a slowdown in consumer spending will trigger some turmoil that the market will have to overcome over the next couple of months. Today I highlight a few stocks on my buy list if they pull back 5% or so. I would love to add to my current positions if we do hit a downdraft in equities. All of these picks have little dependency on consumer spending, sport reasonable valuations and pay decent dividends as well.
Cisco Systems (CSCO): I agree with Stephanie Link that there is value in this networking stock. It is cheap at less than 10x forward earnings and a dividend yield of 2.7%. The company is growing revenue at a decent 5% annually and has a huge amount of net cash on its balance sheet, which accounts for better than 25% of its current market capitalization. The stock currently trades at close to $21 a share. I plan to add to my current position if shares dip below $20....189 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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