Thursday, October 9, 2014
For those faint of heart, the past couple weeks have not been kind; up, down, spin around, back up, only to fall down again. Yikes!
What's an investor to do who wants to Invest Like A Farmer? Keep the plough steady and keep your eyes level on the horizon that's what!
The fact of the matter is that the volatility index has been particularly quiet through the summer and just as the classic entry into autumn begins the VIX is at it again moving up hundreds of points one day and just as much (or more) down the following day.
In spite of these often drastic movements, dividend flows have remained consistent (and rising.) Positions of monopolistic companies often improve during chaos as the most damage is typically inflicted on small capitalization companies (if you want to see something really scary, take a look at the Russell 2000 Small Cap Index.)
Framing all of this is the concern of a major economic slowdown in Europe (probably true) which will spread to the United States (probably true) that will ultimately derail the recovery and impact the real estate market (maybe true, especially in regards to the real estate market which looks poised to triple dip.)
Blue chips here look REALLY appealing as well as select names in the tech and biotech sectors. It's tough to get bullish on small caps in the face of a slowing economy. With the Fed most likely remaining dovish for the foreseeable future real estate should muddle along, except in a dozen areas where it clearly has extend itself. Pockets of wealth, affluence, and creativity will continue to bloom, get funding, and launch exciting new products and services; that roadmap has been in place for quite some time.
For those who wish to Invest Like A Farmer, keeping the plough steady and your eyes level on the horizon should pay off once again in the months to come.