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Are There Stocks That the Federal Reserve Cannot Hurt?

Every time the Federal Reserve meets or even speaks the markets shutter. When will interest rates go up? How bad will that be for stocks and the whole economy? We are wondering, are there stocks that the Federal Reserve cannot hurt either by raising interest rates or holding at the current level? Jim Cramer of Mad Money suggests some financial stocks that an increase in interest rates by the Federal Reserve will not be hurt.

With the Federal Reserve meeting on the horizon, Jim Cramer wants investors to be searching for stocks that could be bought regardless of what happens with interest rates.

“We know that the banks have been hammered. However, the non-bank financials, especially the payment plays, have been holding up pretty nicely, “the “Mad Money” host said.

He suggests that investors look at VISA, MasterCard and PayPal. The point is that none of these companies needs higher interest rates to make money and none will be badly hurt if rates go up. So long as people use their services these companies prosper. What other stocks might be good choices?


Big banks have not done well of late but when interest rates go up banks usually prosper. Market Watch suggests 6 financial companies that would be good bets if interest rates rise.

[There are] six companies Goldman analysts believe “will benefit the most from a potential rate hike.” All six are financial companies: Bank of America Corp. BAC, +0.58%  and Bank of New York Mellon Corp. BK, +0.83% -both of which are both on Goldman’s “conviction buy” list-along with Citizens Financial Group Inc. CFG, +1.37% , Regions Financial Corp. RF, +1.30% , Charles Schwab Corp. SCHW, +1.02%  and Zions Bancorp ZION, +0.62% .

For these companies, “our analysts see on average 46% upside to normalized earnings if rates go back to 3%,” according to the report.
“Many investors are worried about the potential impact to equities in the event the Fed raises rates. However, a rate hike wouldn’t be a negative for all equities.”

There is likely another small increase due this year but it may be a while before the Fed raises rates to 3%. Nevertheless, these are stocks that may do OK with even small rate increase. And what other stocks would be Federal Reserve proof?

Health Care, Materials, Energy

Other stocks that have tended to do well when interest rates go up are those in the materials, energy and health care sectors. USA Today says investors can beat the Federal Reserve buy picking the right stocks.

Higher rates aren’t toxic to all stocks. Energy stocks like Helmerich & Payne (HP), materials stocks like Nucor (NUE) and health care stocks like Humana (HUM) have actually performed relatively well during periods when the Fed is raising rates going back to 1971, according to a USA TODAY analysis of data from S&P Global Market Intelligence that looks at current members of the Standard & Poor’s 500.

On the other hand they suggest avoiding consumer discretionary stocks, auto manufacturers and selected big banks and financials.

Will There Be a Year-End Stock Rally?

The first days of September were good for stocks. One analyst says that this fact indicates that there will be a year-end stock rally. CNBC talked to strategist Tom Lee who says there is a 90% chance of a year-end rally.

Perennially bullish strategist Tom Lee believes the S&P 500 is set to rally 6 to 8 percent before the year is out.

That specific number is based on his analysis of prior market moves. Lee found that since 1940, the S&P ended the year higher in 27 of the 30 times it was up by 5 to 20 percent through mid-September.

One might think that election years, which threaten to bring a great deal of uncertainty to the end of the year, may hold something different. But out of the nine election years covered by the above stat, eight of them saw stocks gain in the final 3½ months, Lee says.

Many believe that the current market is overpriced. If that is the case what would drive it higher? One opinion is that many investors are still hurting from the 2008 market crash and have avoided stocks ever since. Some of these folks are finally becoming believers and will push the market up as they try to get back into the market. The problem is that some will probably come in for a slight gain before the market finally corrects!

Will the Market Correct or Crash?

Not everyone believes that a year-end rally is in the cards. Investopedia reports that James Dale Davidson, who predicted the 1999 and 2007 crashes, says a stock market correction is imminent.

James Dale Davidson is controversial economist who famously made accurate predictions of the financial crashes of both 1999 and 2007. Now, he and other leaders in market correction predictions are suggesting that signs are pointing to another impending correction in the markets, and possibly one that is of greater magnitude since any crash since the Great Depression.

Interestingly Mr. Davidson does not believe that sources of current economic and market concern will cause the correction. This is a technical prediction. Many of us would like to see the fundamentals that drive the market higher the 27 of 30 times that stocks were up in September and rallied for the rest of the year. And it would be nice to see what Mr. Davidson thinks will pull the market down if it is not overpriced stocks. With this sort of confusion about the market how should an investor proceed?

Investment Returns and Investment Decisions

The point of investing is to make money and not lose any. As we gain experience with the results of our investments we, hopefully, make better investment decisions. The Economic Times writes about incorrect assessment of returns leading to bad investment decisions.

For most investors, point-to-point return figures serve as the performance yardstick. This can be misleading. The current return profile of equity funds, for instance, is a case in point. The three-year returns of most equity funds comfortably outshine the five-year figures (see chart). Large-cap funds have clocked 13.5% CAGR over the past five years compared to 17.8% over the past three. Mid-cap equity funds have yielded 20.6% CAGR over the past five years against a whopping 34% in three years.

It is an interest discussion and worth the read. The point is that staying invested, even through events like the Great Recession smooths out the peaks and valleys. You may want to get into the market for a year-end rally but a better choice is probably to pick stocks with high intrinsic value and invest for the long term.

Will There Be a Year-End Stock Rally? PPT

How Much Do You Need to Start Stock Investing?

People invest in stocks to make money, save for retirement or simply beat the return on a CD at the bank. Buy and hold investors know that starting early and routinely investing a set amount is a good way to take advantage of market growth over time. How much do you need to start stock investing? In theory you only need to buy one share of one inexpensive stock which could cost only a few dollars plus commission. As a practical matter it is better to start with a few hundred or a thousand dollars because that is typically the minimum deposit requirement a brokerage firm will ask for to service your account. NASDAQ discusses how to start investing with only $1,000.

Stock brokers come in two flavors: full-service and discount. As the name implies, a full-service broker provides much more in the way of service, but it only deals with higher net worth clients. It’s not unusual to see minimum account sizes of $50,000 and up at full-service brokerages.

This leaves the $1,000-investor with the option of a discount broker. Discount brokers have considerably lower fees, but don’t expect much in the way of hand-holding. Fees are low because you are in charge of all investment decisions – you can’t call up and ask for investment advice. With $1,000, you are right on the cusp in terms of the minimum deposit. There will be some discount brokers that will take you and others that won’t. You’ll have to shop around.

You also could purchase shares directly from a company through direct stock purchase plans (DSPPs). But some of these plans have a minimum investment amount restriction, which ranges between $100 and $500.

And make sure your personal finances are stable before you start investing in stocks. In our article, How to Start Investing in the Stock Market, we talked about this.

A good rule of thumb is that you should not invest what you cannot afford to lose. Thus you need to be able to pay your mortgage or your rent and make payments on your car and other expenses. Then you should have a couple of months of expenses in the bank and your credit cards paid off.

What you do not want to be confronted with is selling your stocks at a discount because just when the market momentarily corrected you need to make a car payment or catch up on other bills.

Penny Stocks versus Blue Chips

The gold standard for long term investors is a dividend paying blue chip stock. Unfortunately stocks like Boeing, Coca Cola or Disney currently sell for $129.01, $42.38 or $92.87 respectively. The cost per share of a blue chip stock reduces the number of stocks in which you can invest with $1,000 or less. If you want to diversify your portfolio you will need to look to lower priced stocks although investing in penny stocks can be tricky. The safer bet when you start investing with a small amount of capital is to pick the best stock even if you only purchase a share or two and then add to your holdings on a routine basis as time and finances allow.

How Much Do You Need to Start Stock Investing? PPT

End of the Easy Money Era

The VIX fear index hit its 11th highest level ever as investors come to believe that the Fed has signaled the end of the easy money era. Is this an overreaction or should you be selling stocks right and left? Investor Place comments on how the VIX just misses the top ten most volatile days in a quarter of a century.

The CBOE Volatility Index (VIX), or fear gauge, soared ahead 39.9% on in Friday trading, making it the 11th greatest move in the index in more than 25 years.

Wall Street simply got spooked by worries that the end of the easy-money era is over. But let’s get real-a 25 basis point or even 50 basis point increase in the fed funds rate is hardly going to torch the bond markets and, in fact, would show the Fed’s greater confidence in the U.S. economy’s ability to both weather higher rates and continue to expand.

Despite a 2.1% decline in the Dow and a 2.5% drop for the S&P 500, both indices are less than 3% below the all-time highs set in mid-August.

Their opinion is that the current worry about a small increase in interest rates is much ado about too little. To understand how a small rate increase might signal the end of the easy money era let’s start with the VIX.

The VIX Fear Index

According to Investopedia VIX is the ticker symbol for the CBOE volatility index.

VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking, is calculated from both calls and puts, and is a widely used measure of market risk, often referred to as the “investor fear gauge.”

VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.

A VIX of 39.9% is certainly in the fear and uncertainty range. Should it be? Is the market at such risk? Normally that might not be the case but when stocks are generally overpriced it could be time for a correction.

Are Safe Stocks Really Safe?

The Wall Street Journal reports fear for the safest investments as the market stutters.

Investors who spent the summer floating serenely on mirror-calm markets have been frantically bailing out the boat in the past two days. Whether the storm that hit U.S. stocks on Friday and spread globally on Monday is the start of something much worse or merely a squall depends a lot on what explains it: the Federal Reserve, global central banks or the unwinding of excessive complacency. Unfortunately for shareholders, the signs point to the latter.

In a normally priced market and with more normal interest rates it would not be a huge deal to see an increase of a quarter percent or so in the Federal Funds rate. The problem is that rates have been historically so for 8 years and the market has come to assume they will remain so. Overpriced stocks, especially dividend stocks that will get hurt with higher rates may be in for a big correction. This pending end of the easy money era is seen in the abrupt rise of the VIX fear index.

End of the Easy Money Era PPT

Is There a False Economy?

All sorts of interesting ideas pop up during a presidential campaign. This year one of the ideas floated by candidate Trump is that the Fed has created a false economy. CNN reports the story.

Now Trump is blaming the Fed for creating a “false economy” with its emphasis on extremely low interest rates.

“They’re keeping rates down because they don’t want everything else to go down,” the Republican presidential nominee told Reuters on Monday.

Trump said the “only thing that is strong is the artificial stock market.”

It’s the latest example of Trump doubting the bull market in stocks and criticizing the Federal Reserve, an institution that tries hard to avoid being seen as having political motivations.

“We have a very false economy,” Trump told Reuters. “At some point the rates are going to have to change.”

What the heck does this mean and if there is a so-called false economy how does that affect investing? The Washington Post weights in on the issue with an article arguing that there is no false economy.

Much of what Donald Trump says about the economy has little relationship to reality. For example, his oft-repeated claims that the nation’s real unemployment rate is 40 percent, that 100 million people are looking for work or that he’s going to bring back all the jobs that have gone overseas are pure falsehoods.

Then there’s the stuff that’s more incoherent than fact abuse, such as his recent statement that “we have a very false economy.” I think what he’s saying here is that the real economy – gross domestic product, incomes, jobs – is pumped up by accommodative monetary policy, and that if the Fed pulled out the rug, i.e., raised rates, which he apparently wants it to do, these variables would tank. Why tank the economy, you might ask? Beats me; that goal makes about as much sense as Trump’s repeated flip-flopping on this rate-hike issue, which he was on the other side of in May after originally embracing his current position in November.

There are purists who believe in a laissez-faire economy which is a policy or attitude of letting things take their own course, without interfering. Over the long haul people who think they can make more money in an unregulated market argue for one and those who are hurt by dirty dealing in an unregulated market argue for controls. Regarding the Federal Reserve, they are tasked with the following according to the web site of the Federal Reserve System.

[The Fed] was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Federal Reserve was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law. Today, the Federal Reserve’s responsibilities fall into four general areas.

  • Conducting the nation’s monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices.
  • Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.
  • Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.
  • Providing certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions, and playing a major role in operating and overseeing the nation’s payments systems.

Because the Fed’s actions strongly influence the economy, investors are wise to pay attention. The Fed has been in existence for more than a century and gets credit for pulling the nation back from the brink of economic disaster after the Great Recession. This is the world that we investors live in so calling the system false is typically incorrect and usually self-serving.

Is There a False Economy? PPT

Should You Invest in Asian Stocks?

Should you invest in Asian stocks or is slowing Chinese growth a reason to stay away from Asia? A look at the Japanese, Taiwanese and South Korean experiences are instructive in considering the Chinese slowdown and where in Asia stocks might be going up.

Japan: Economic Powerhouse to Deflationary Economy

Japan growth was spectacular for decades after the Second World War. Technological advancement along with cheap labor and a managed currency put Japanese products in homes worldwide. Then, as the Japanese labor force aged and demanded higher wages Japan started sending jobs offshore, mostly to Southeast Asia.

Taiwan, Singapore and South Korean had similar experiences. All of these countries had centralized economic planning, used currency manipulation and had the advantage of cheap labor in their growth phases. And all of them were forced to pay higher wages to an aging labor force. The answer for each of these economies has been to stimulate internal spending and loosen the authoritarian grip on their markets. Japan and the rest have evolved into healthy and stable modern economies. China is hesitant to convert to a more liberal and less authoritarian controlled economy for fear that the Communist hierarchy will lose control.

The place where new growth is occurring in Asia is in the Southeast of the continent and the islands offshore. This is the region of ASEAN, the Association of South East Asian Nations. A hint of what is going on there comes from an article in Bloomberg about a commodity rebound in the region.

China may be slowing, but a commodities rebound is under way and the world’s biggest miner knows where the next growth story is building – emerging economies in Southeast Asia.

Combined gross domestic product in the ASEAN-5 nations – Indonesia, Thailand, Malaysia, the Philippines and Vietnam – will rise about a third to $3 trillion in the five years to 2020, fueling commodities-intensive infrastructure projects. Momentum like this across Asia will help maintain and increase commodity demand, BHP Billiton Ltd.’s Chief Executive Officer Andrew Mackenzie said this week.

These are the same nations that are concerned about China’s territorial ambitions in the South China Sea and general dominance in the region. Thus trade among China’s neighbors and excluding China may become a strong feature of the region and a reason to invest in Asian stocks outside of China and centered on the ASEAN nations.

ASEAN Summit

This week President Obama attends to ASEAN summit in Laos, an indication of the importance that the U. S. government places on the region. J. P. Morgan writes about growth opportunities in the ASEAN region.

With a population of more than 600 million and a nominal GDP of $2.31 trillion, ASEAN (the Association of Southeast Asian Nations), made up of Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam, is fast becoming a major economic force in Asia and a driver of global growth. As the economies of neighboring China and India decelerate, and as the U.S. shifts its focus to the East, the region is increasingly becoming a destination for investment.

In spite of challenges, ASEAN’s economic performance continues to outpace the rest of the world. The Asian Development Bank estimates the bloc’s GDP growth at 5.6% in 2014, up from 5.3% in 2013.

Should you invest in Asian stocks in the ASEAN region consider ADRs or funds that focus on this area.

Should You Invest in Asian Stocks? PPT

How Profitable Is Stock Investing?

If you are looking to put some money away for a rainy day or save for retirement it would be nice to have that money work for you as well. The stock market is often touted as the best place to put your money and have it earn a profit. But just how profitable is stock investing? In the stock market quality begets profits over the long term. This is the world of buy and hold investing. In the short term research into specific stocks can lead to tidy profits which you often will want to take back out and turn into cash. This is the world of buying low and selling high. In regard to investing in stocks Investopedia writes about five stock market myths that can lead you astray.

The laws of physics do not apply in the stock market. There’s no gravitational force to pull stocks back to even. Over 20 years ago, Berkshire Hathaway’s stock price went from $7,455 to $17,250 per share in a little more than five years. Had you thought that this stock was going to return to its lower initial position, you would have missed out on the subsequent rise to $170,000 per share over the years.

We’re not trying to tell you that stocks never undergo a correction. The point is that the stock price is a reflection of the company. If you find a great firm run by excellent managers, there is no reason the stock won’t keep on going up.

How profitable is stock investing?

If you had purchased 100 shares of Microsoft at $21 a share in 1986 when it went public your $2,100 investment would have turned into 28,800 shares after stock splits, be worth three quarters of a million dollars and be paying $41,472 in dividends each year.

If you had bought one “A” share of Berkshire Hathaway in 1990 it would have cost you $7,100. Today it would be worth $224,000.

There are other examples of investment “home runs.” In general strong, well postioned and well managed companies continue to make money and grow year after year. However, there comes a time when their market is saturated and profits plateau. That is why getting into these stocks when they are new and cheap or are cheap due to temporary economic factors is a good way to see the best profits. This is the world intrinsic stock value.

In the aftermath of the stock market crash of 1929 in the early days of the Great Depression Benjamin Graham introduced the concept of value investing. No longer would those buying and selling stocks need to act like they were at the casino. With the concepts of intrinsic value and margin of safety Graham taught investors a rational means of investing in stocks.

Read the article for the formula. The point is that you can find and purchase stocks that are selling below their value to you as an investor. These stocks will make money over the years. Their stock prices will rise as the market catches on. And many will be or become dividend stocks that provide you with a nice quarterly cash payment.

How Profitable Is Stock Investing? PPT

Top Stocks to Buy and Why

Profitable investing always comes down to what are the top stocks to buy and why. Is intrinsic stock value the best indicator? Should you be studying up on technical analysis in order to stay out step ahead of evolving market sentiment? Here is what The Street says about five stocks that are poised to deliver big gains and then our thoughts on the subject.

These stocks have both short-term gain catalysts and longer-term growth potential.

We’re still experiencing a tale of two markets as we round the corner for the final week of August – while the S&P is up a bit over 5% year-to-date, nearly half of the stocks in the big index are actually up 10% or more since the calendar flipped to January. Simply owning more of the stocks that are working in this environment and fewer of the ones that aren’t could hold the keys to substantial outperformance this year.

These folks pick their so-called rocket stocks based on consensus upgrades by analysts and surprises in earnings. Their rationale is that when a stock is liked by analysts and shows a surprise uptick in earnings institutional investors tend to pour money into them driving up their stock prices.
Their 5 rocket stocks for the week are Facebook (FB), Illinois Tool Works (ITW), Haliburton (HAL), Constellation Brands (STZ) and Best Buy (BBY).

But, is this the best way to pick top stocks?

Top Stocks for the Short and Medium Term

The approach used by The Street is useful for picking top stocks in the short term. Here is an example of why this works.

Years ago an investor friend of mine used a simple strategy to pick short to medium term winners, so-called top stocks. In the days before Barrons was posted online he would purchase a copy each Saturday morning. He would look to see if there any articles by stock analysts and if they made a decent argument for why to purchase a stock or two. Then he would call his stock broker (pre internet days) and buy one, two or three stocks from the article. His cut off for profits was 30% and his cutoff for losses was 10%. Almost invariably these stocks that were talked up in Barrons went on a multi-week run as long term investors decided these were good investments based on the article and based on the fact that the stocks almost immediately started to rise. Over the longer term the stocks that were hyped in Barrons did not always do well. Taking a 30% profit on almost all of the stocks and absorbing a 10% loss on a few was a good strategy and profited my friend for years.

For the longer term picking top stocks and why you choose them has more to do with strong fundamentals and picking such stocks when the market corrects and takes all good stocks with it. We wrote a year ago about how to identify first signs of a market correction. When the market is overvalued by historic standards, like today, the first step is probably to pick stocks based on strong fundamentals and tag them for purchase when their price falls and their intrinsic value rises.

Top Stocks to Buy and Why PPT

When Yellen Speaks Stocks Fall

Janet Yellen, Chairperson of the U.S. Federal Reserve has spoken and U.S. stocks are lower. Speaking at the yearly Jackson Hole economic symposium sponsored by the Kansas City Federal Reserve Bank, Yellen said that the case for a rate increase has gotten stronger and then stocks headed down. The Wall Street Journal comments on Yellen’s remarks about interest rates.

The remarks, which had been anxiously awaited all week, sparked an initial reaction to sell stocks that quickly reversed itself. Later in the session, stocks again fell, as investors’ expectations for a rate rise later this year climbed. Treasury yields and the dollar also fluctuated before rising.

Loose U.S. monetary policy has been a driving force in financial markets, keeping the dollar soft and supporting stocks and bonds.

Will higher rates kill the current stock market rally? Despite the apparent fear and trepidation of the market, the Fed is likely to raise rates by another tenth or two tenths of a percent. A little historic perspective on interest rates is in order.

Effective Fed Funds Rate

It has been since before the 2008 market crash that the effective Federal Funds Rate was been anywhere but near zero. However, the Federal Funds Rate has been as high as 19.4% in July of 1981. Courtesy of the Federal Reserve Bank of St. Louis here is a chart showing the Effective Federal Funds Rate going back to 1955.

The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.
The effective federal funds rate is essentially determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target.

The Federal Open Market Committee meets eight times a year and determines a federal funds target rates which it aims for by buying and selling government bonds. As the graph shows, the historic oddity is the fact that rates have been near zero for eight years! Although high interest rates can hurt the economy we are usually talking about the rates seen in the 1970s. The economy was doing fine in the late 1990s even though the Federal Funds rate was in the 5% range.

Winners and Losers, What and When to Buy

Utility stocks will take a hit on the threat of an interest rate rise as noted by Investor Place.

There’s no arguing that utility stocks have knocked it out of the park this year. Year to date, the Dow Jones Utility Average (DJU) is up better than 18%. Utility stocks are always attractive to income oriented investors because of their dividend yields. But is now the time to buy?

Probably not. In fact, I recently recommend taking profits in utility bellwether Southern Company (SO). But it looks like investors will get an opportunity relatively soon to pick up some high quality names in this dependable, dividend paying sector.

And there likely will be bargains to be had for those looking for secure retirement investments after these dividend stocks over-correct. Dividend stocks are normally considered an alternative to bonds but now days when interest rates are nearly zero dividend stocks are a better bet. Smart investors will wait for a slight correction and then add to their buy and hold portfolio. If rates go too high that could be another issue but look at the Federal Funds Rate graph for a little perspective.

When Yellen Speaks Stocks Fall PPT

What Are Secure Retirement Investments?

When retirement approaches you do not want to have your investments in vehicles that crash like the stock and real estate markets did in 2008. But what are secure retirement investments in today’s world and what sort of returns can you expect. discusses the current lack of secure investments and how it is hindering global growth.

Unless you’ve been following the subject closely, you may not have heard of one of the biggest barriers slowing the revival of global economic growth over the last decade. That would be the “safety trap,” a problem arising from a lack of low-risk investments around the world.

To see the problem, recall that after the financial-sector crisis in 2007 and 2008, a large portion of investments people had considered safe-mortgage-backed securities come to mind-were suddenly understood to be risky. And yet, the ensuing flight to safe assets, such as U.S. debt, has come with its own cost. The increased demand for these safer investments keeps interest rates at low levels, to the point where central bankers cannot spur additional economic output by further lowering those rates. This is the “trap” part of the safety trap.

It turns out that the number of safe assets for investors has fallen by about a half in the last ten years. U.S. debt (treasury bills) were and still the safest of the safe but interest rates fall farther and farther as demand for U.S. and other government debt increases. It is certainly wise to put some of your retirement assets in U.S. treasuries in order to preserve capital but what about something that generates a little income along the way. After all people are living longer and longer so you don’t want to run out of money when you still have twenty or thirty years of life ahead of you!

How Safe a Bet is Coca Cola or Proctor & Gamble or Colgate Palmolive?

You can make more money with dividends from a strong dividend stock than from U.S treasuries these days. But how do you know that a company is a safe bet? Warren Buffet has been quoted as saying that he does not know what a tech stock will be worth in ten years but that he can easily guess what a Snickers bar will sell for. Add toothpaste, paint, glass, soft drinks and makers of batteries or heating and cooling controls to the “snickers” list. There are companies that have paid dividends for more than 100 years and will probably be paying dividends for a hundred more. Take a look at for their comments about 15 such stocks and their predictions as to which will or will not still be paying dividends a century from now.

As a dividend investor, you might have trained yourself to look for fantastic yields when placing your money. While 10% yields are attractive, they’re worthless if the company can’t sustain the payments.

These 15 companies have paid out dividends for at least 100 years-and are hoping to continue for a hundred more. Will any of these companies still be paying a dividend when we ring in the 22nd century?

The stocks that have paid dividends for more than 100 years and who the authors believe will still be doing so in the 22th century are these.

General Mills, GIS
Johnson Controls Inc., JCI
Church & Dwight Co., Inc., CHD
Stanley Black & Decker, Inc., SWK
Eli Lilly and Co, LLY
Proctor & Gamble Co., PG
The Coca Cola Co, KO
Colgate Palmolive Company, CL
PPG Industries, Inc., PPG

The ones that have paid for more than 100 years and might not make the next century are these.

E I Du Pont De Nemours and Co, DD
Edison International, EIX
Exxon Mobile Corporation, XOM
Consolidated Edison, Inc., ED
Chubb Corp, CB

What Are Secure Retirement Investments? PPT

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