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Bears be gone!

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February 10, 2010 – Comments (0) | RELATED TICKERS: JNJ , ORCL , PFE

Ah heck, I don't care if the bears stick around, they just make new purchases cheaper for me...

My article for today: Forget the Bears: There Are Still Stocks You Should Be Buying

Everyone seems to be worried again that the market is going to drop. Frankly, I don't really care all that much. What concerns me about the market isn't that the overall valuation suggests that the market is going to drop soon, but rather that it suggests that returns will be low.

A semantic difference? Maybe, but I think it's important. It denotes a difference in focus. Saying that a high valuation is going to lead to a market drop suggests that you're looking at the market from a short-term perspective. Saying that a high valuation is going to lead to low returns suggests longer term view.

All that said, as I note in the article, I think Jeremy Grantham is onto something with the "high quality" US equities. Though I'm a big fan of dividends, I don't have any special place in my heart for large, "high quality" stocks, I simply like them right now becasue the pricing looks a lot more attractive than other areas of the market.

In fact, I'd probably prefer to be investing in smaller companies with more growth potential (that are hopefully also paying a dividend). So here's to hoping that prices on small caps start to moderate a bit...

Matt

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