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Which ONE of the 5 highest yielding DOW 30 stocks (currently) would you recommend and why?

Per a recent article posted today (February 10, 2014) on MSN MONEY the 5 highest yielding stocks were written-up. They include 1. AT&T 2. VERIZON 3. INTEL 4. CHEVRON 5. GENERAL ELECTRIC:
http://money.msn.com/top-stocks/post--the-5-highest-yields-on-the-dow?ocid=vt_twmsnmon

Feb 10, 2014 by Michael from Santa Monica, CA in  |  Flag
5 Answers  |  6 Followers
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5 votes

I would never recommend buying one individual stock no matter how attractive the yield. It is extremely important to diversify your portfolio. There are many ways to build a portfolio of high yielding stocks that is extremely diversified on the following parameters:

1) Asset Classes 2) Sectors and/or Industries 3) Geography 4) Market Capitalization 5) Weighting Methodology

For examplet, our low cost Multi-Asset Income Model owns 15-20 different ETFs that collectively produce a yield of approximately 7.5% while having some growth potential as well.

There are many pitfalls to simply chasing the highest yielding stocks. One needs to factor in the quality of those dividends as well as the sustainability and growth potential.

Hope I have raised some issues to ponder and made you think about changing your question!

1 Comment   |  Flag   |  Feb 11, 2014 from Appleton, WI
Colin

I agree with Prateek. Buying individual stocks is probably only good for advisors, brokerages, and the very savvy investors (those who do this as their job...aka day traders and such). If you had to ask which one is recommended and why, well a) you'd get a variety of answers all saying different things and b) it would indicate you're not a savvy enough investor for owning individual stocks. Stay out of the deep end where the sharks are and stay in the kiddie pool like me and the rest of the general public. Invest in low cost mutual funds or ETFs where the costs are low and the diversity is high. Owning individual stocks makes me too uncomfortable having so much risk (and money) riding on one or several company's stocks.

Flag |  Feb 11, 2014 near Oak Creek, WI

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4 votes

While guys like the Mad Money guy and others would lead you to believe you can always chase returns and the "next big thing", there are so many ways to create a complete diversified portfolio that I would never recommend individual stocks. Unless you can sit in front of your computer all day and you have the ability to analyze a ton of data at the same time, I would recommend you leave that to professional portfolio managers. I hope that helps!

Comment   |  Flag   |  Feb 11, 2014 from Bloomingdale, IL

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4 votes

All large company stocks are fairly valued at any given time by the market. To say one is better than the rest is to imply that you have better pricing skills than the market as a whole. With large heavily traded stocks, this is highly unlikely. Mr. Armijo offers reasons to buy Intel - but his reasoning isn't unique to him. Are there any investors who aren't aware of the trends in cell phones and robotics? So if all stocks are fairly valued based on the market based on information available today, what you really need to know is what we DONT know today that we WILL know tomorrow. And that is impossible. Since you don't know whether the "new news" about any particular company will be good or bad, the best approach is to own a selection of stocks. Hopefully those that disappoint will be offset by some that do well.

As for those predicting a fall in the market - they may be right, or they may be wrong. Perhaps if you have enough money to invest you can invest a little at a time over an extended period of time, which lowers the risk that you will buy into the market at its peak. This is called dollar cost averaging.

1 Comment   |  Flag   |  Feb 17, 2014 from Bridgewater, NJ
James D. Kinney, CFP®

Oh, as for selecting the best of the Dow - a dartboard is at least as good as most stock analysts - so put a ticker on each number of your dartboard and start tossing darts. I jest somewhat - but in all seriousness most stock pickers do no better than random selection.

Flag |  Feb 17, 2014 near Bridgewater, NJ

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3 votes

I wouldn't recommend any of them. With stocks at such high current levels I recommend going to cash and waiting for the chance in the near future to pick up blue chip stocks at a fraction of the current market.

Comment   |  Flag   |  Feb 13, 2014 from Medina, OH

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2 votes

Instead of 'beating around the bush' about a well diversified portfolio (of which you hopefully do have); it seems you want to know which of the 5 is a suitable investment. If you can buy and hold for 3-years or longer I think you would do well to invest in INTEL per recent articles Zi have read about the future of tech gadgets like cell phones, stablest & the forthcoming age of robotics & nanotechnology.

1 Comment   |  Flag   |  Feb 11, 2014 from Santa Monica, CA
Richard K. Armon

Michael, way to go. With 2013 behind us, maybe stock picking will be relevant again.

Flag |  Apr 20, 2014 near Wayne, PA

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