Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
Login Archives Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: Prepare for stock market 2013, stock market crash, Stock Market Crash 2013

If You're Worried About Stock Market Crash 2013, Buy These

By Jonathan Yates, Money Morning • September 17, 2012

View Comments

Start the conversation

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

The market has surged in recent action, but these gains haven't eradicated the chances of a stock market crash in 2013.

Global markets are up on news that central banks will deliver more stimulus measures, such as QE3 in the United States.

Even though stimulus measures trigger market rallies, they're actually admissions that economies are so weak they need government assistance.

As Federal Reserve Chairman Ben Bernanke recently stated, the economic conditions in the United States, particularly high unemployment, should be of "grave concern" to all.

Legendary investor Jim Rogers declared in an interview that, "In America, we have had recessions every 4 to 6 years at the beginning of the republic. 2013 is going to be a mess. It always has been, there's no reason it won't be this time too. Be careful..."

In order to heed Rogers' warning, investors should consider adding the following stocks to their portfolios.

Prepare for Stock Market Crash 2013

The best way to profit from Rogers' sage advice is to buy stocks that have a healthy income stream and a history of increasing their income flow, even in times of economic downturn like what could happen next year.

Stocks such as these are called "Dividend Aristocrats."

That title is earned when a company increases its annual dividend for at least 25 consecutive years. Over that period, there has been The Great Recession and a number of other declines in the United States.

In the "mess" that Jim Rogers predicts for 2013, three "Dividend Aristocrats" that can be expected to perform well based on appealing valuations, solid franchises and past performance are Aflac Inc. (NYSE: AFL), Sysco Corp. (NYSE: SYY) and The Coca-Cola Co. (NYSE: KO).

Aflac Inc. is a very sound insurance company with a dividend yield of around 3%. The average dividend for a member of the Standard & Poor's 500 Index is around 2%. Insurance companies that are well managed, like Aflac Inc., do well in stock market downturns due to the stable business base. The products offered, such as annuities, are more in demand as consumers, particularly those nearing retirement, turn away from riskier investments.

Even if 2013 is a "mess," people will still have to eat.

Much of that food will be delivered by Sysco Corp., which is a North American food distributor.

Sysco has a dividend yield of 3.7%. Sysco is very appealing as it has a price-to-sales ratio of just 0.42. That means that every dollar of sales is presently valued at only forty-two cents in the stock price.

As the largest holding of Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), Coca-Cola needs no introduction.

Asked about the unrivaled brand name and global presence of Coca-Cola that has led to its global recognition, Warren Buffett stated, "If you gave me $100 billion and said, "Take away the soft-drink leadership of Coca-Cola in the world,' I'd give it back to you and say it can't be done."

The dividend yield of 2.68% for Coca-Cola also increases its appeal.

In addition to the above average dividend yield with a history of being increased annually over the decades, each of these stocks has another feature that is alluring for the "mess" ahead: a low beta or a low price-to-earnings growth ratio.

Beta is a measure of a stock's volatility. The beta for the stock market as a whole is 1. Research has proven that stocks with a below average beta perform better over time.

It turns out that it is possible to have a higher return with lower risk, after all.

Sysco and Coca-Cola offer that unique component. Coca-Cola has a beta of 0.51. Sysco Corp. has a beta of 0.70.

Investing legend Peter Lynch considers the price-to-earnings growth to be one of the most critical financial indicators for a stock. A price-to-earnings growth ratio of 1 is considered to be adequate. The lower the price-to-earnings growth ratio of a stock, the better the future growth prospects for its share price.

Aflac Inc. has a price-to-earnings growth ratio of just 0.86.

Dividend-paying stocks will also be more valued due to the low interest rate environment that Bernanke has pledged will be maintained well until 2015. Investors seeking income will turn increasingly towards stocks, particularly those with a history of raising its dividend.

As a result, Dividend Aristocrats such as Coca-Cola, Sysco and Aflac will be even more attractive as investors brace for a possible stock market crash in 2013.

[Editor's Note: Want to be better prepared to handle your money as the uncertainty of 2013 approaches? Check out our latest offer that lets you profit while you learn.]

Related Articles and News:

  • Money Morning:
    Stock Market Crash 2013: What the "Hindenberg Omen" Tells Us
  • Money Morning:
    Planets Align for Stock Market Crash in 2013 ­− If Not Sooner
  • The New York Times:
    Fed Chairman Makes Case, in Strong Terms, for New Action
  • CNBC:
    Jim Rogers on JPMorgan, the Dollar & More
  • AAII Journal:
    The Peter Lynch Approach to Investing in "Understandable" Stocks

[epom]

Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter

Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…

Claim My Free Report

Subscribe
Login
Notify of
guest

guest

1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
jon jay
jon jay
10 years ago

People might also consider inverse, leverged Exchange Traded Funds. I'v already cleared a few nundred dollars on the small ups and downs of the market. When the big crash comes, owners of these stocks will jump for joy.

0
Reply


Latest News

September 20, 2023 • By Tom Gentile

How to Cash In On The Most Perfectly-Timed Selloff in History

September 18, 2023 • By Garrett Baldwin

Dogs That Are Fluent in Spanish for $200, Alex.

September 18, 2023 • By Shah Gilani

earnings
This Income Play Is a Perfect Hedge in a Sluggish Market
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Penny Hawk Midday Momentum
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Quantum Data Profits Flashpoint Trader Darknet Alpha Accelerators Brutus Alerts Resource Traders Alliance L.A.U.N.C.H. Investor Rob Roy Trader Long-Term Equity Profits

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz