The market is now at 13,000. For the most part, I believe that we are out of the woods. For those that have heeded my suggestions a month ago made 9.25% on their money had they received normal market returns.
However, I believe the market is more risky now than at 11,900. For me, I'm choosing to hedge the market by employing a couple of strategies. I'm interested in consumer staples stocks like PEP, KO, GIS, and PG. I'm also interested in shorting the Chinese market thru FXP.
I think the financial stocks are poised for a turnaround, but it is really stock specific. Stocks like TROW, GS, STT, and SCHW are well-round companies. TROW is a little expensive. PRU is a nice stock to own, but if you own 100 shares of stock in PRU, it might be worth using a put option contract to hedge your positiion as the hurricane season is right around the corner. I think the real bargain is in WFC.
Defense contractors, I really like. BA, NOC, LMT, and HON. I think these are great defensive stocks.
COP is a cheap integrated oil play as is Royal Ducth Sell (RDS-B). I really think it was a mistake that RDS-B wasn't added to the DJIA instead of Chevron. I realize that Shell is a Dutch oil company, but it would have been better to have something like Shell as it is more representative of a Dow-like company.
GSK is a great stock with a 5.7% dividend yield. I also think it belongs to the DJIA even as an international UK company because it is only $16 million less than PFE so it wouldn't take much for GSK to become the largest biotech company in the world. PFE has a 6.4% dividend yield but is slightly more expensive.
GOOG, INTC, RIMM, and VMW are all tech stocks that I like. Buying QQQQ or XLK are also options. AAPL has great prospects but is a momentum play; it is defintiely not a value play.
X has done very well. It has an okay balance sheet, but there's a little risk as there is a lot of money tied up in receivables and inventory. This is among the riskiest stocks listed as there is potential for downside, but it was just an idea.
Aqua