BERKO: Six strong companies – and some important ‘ifs’
Dear Mr. Berko:
I have $86,000 in CDs and have never been in the market. My new broker and I feel that the stock market will be great in 2012 and 2013, and he has advised that I invest in three mutual funds. But I want to own individual stocks, too. Could you tell me the names of maybe six top stocks that will do real well in the market?
S.A., Chicago
Dear S.A.:
If you believe that the political solutions to Europe’s economic problems will be successful; that Europe’s banks won’t suffer the ignominy of begging for new capital; that the European economy will prosper; and that the kerfuffle across the pond will not affect our economy, then you share a majority opinion with wise investors who are buying U.S. stocks.
If you believe that Chinese real estate is far from a bubble; that inflation is less than 5 percent; that Chinese banks are strong; and that China’s economy is not dependent on demand from Europe or the United States, then you share a majority opinion with wise investors who are buying U.S. stocks.
If you believe that U.S. employment will be strong; that consumer income and spending will grow; that housing prices will improve; that U.S. exports will continue to boom; and that corporate profits will continue higher, then you share a majority opinion with wise investors who are buying U.S. stocks.
If you think that Congress will come to a consensus on the national debt and the deficit; that Social Security and Medicare are untouchable; that interest rates will remain low; that federal spending will decline; and that the administration will create new jobs, then you share the majority opinion with wise investors who are buying U.S. stocks.
And finally, if you believe that Occupy Wall Street is a fad that will soon fade into the ethers; that OWS protests won’t continue spreading; and that the anger won’t give way to violence, then you share a majority opinion with wise investors who are buying U.S. stocks.
If you believe all of this, then you should believe that the following six issues will help make your first venture into the stock market an overwhelming success.
The Procter & Gamble Co. (PG-$65.93) is an $85 billion consumer packaged goods company with a 3.3 percent dividend that has been increased for 30 consecutive years. Apple Inc. (AAPL-$393.88) is a magnificent maker of communications devices, and there’s a rumor that it might initiate a dividend in 2012. Goldman Sachs Group Inc. (GS-$92), which yields 1.8 percent, is the most powerful investment bank in the world.
Wells Fargo & Co. (WFC-$26.27) has $76 billion in revenues, a profit margin of more than 20 percent (wow) and a 48-cent dividend that should be increased in 2012. Whirlpool Corp. (WHR-$48.12) is a fine manufacturer and marketer of home appliances, and the company boasts $19 billion in revenues and a swell 4.3 percent yield. Temple-Inland Inc. (TIN-$31.62) sold more than $4 billion of corrugated packaging and boxes used in bulk shipping last year. The TIN dividend yields 1.6 percent and could be raised in 2012.
If you and the majority of wise investors are right, 2012 should be a wonderful year for you.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or email him at malber@adelphia.net. ©2011 Creators.com
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