Insights

In John’s recent interview with Think Advisor, he discusses the stock market outlook plus his favorite stocks for 2022.

There always seem to be frightening headlines with which equity investors must contend, the Omicron variant the latest, yet the asset class historically has generated excellent long-term returns for those that remember that the secret to success in stocks is not to get scared out of them. Easier said than done, we know, especially with the talking heads on financial television and editors of business publications competing 24/7 for attention, one day raving about the latest market rally and the next warning of impending doom.

These days, inflation and the Federal Reserve seem to be providing plenty of investor consternation. In this report, we examine the historical evidence for equity returns versus CPI rates, Fed Tapering and rising interest rate environments. We think readers will find the data eye-opening, plus we offer a dozen of our current Value stock favorites.

There was a renewed enthusiasm for stocks in the Value camp in January, but we think that Value should always be front and center. Nearly a century of data, academic research and our own quantitative research support our affinity for bargain-priced securities.

In our latest special report, we detail seven themes and specific stocks which we think those who share our long-term view should be considering as we head into 2022. True, there is a litany of what we believe to be inexpensive names, but one must still construct a diversified portfolio of these equities. And perhaps more importantly, as the secret to success in investing is not simply to select good stocks, but to not get scared out of them, we offer the reminder that we also make our nerves of steel available via our wealth management services.

Oil titan John D. Rockefeller once quipped, “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” Decades later, we continue to find significant appeal in dividend stocks as low interest rates for developed markets around the globe plague income-oriented investors, while sustained inflation threatens to erode our purchasing power. And while paying a dividend is not a criterion for every stock we own at the The Prudent Speculator, the yields on our portfolios rival that of the Russell 3000 Value index, which sports a dividend yield north of the yield-to-maturity on the 10-year Treasury. In addition to the income we receive, a company’s dividend track record might also say a thing or two about its stewardship of capital, durability and regard for shareholders.

We think the tax rate analysis is eye-opening and, as is often the case, we believe it supports an emphasis on Value stocks in one’s asset allocation mix. We like the perspective offered by Vannevar Bush, “Fear cannot be banished, but it can be calm and without panic; it can be mitigated by reason and evaluation,” and we think this quick-read report is well worth a look.

We even offer a listing of 10 undervalued stocks that are already paying an elevated tax rate, suggesting that their bottom lines might not be so heavily impacted by a hike in the corporate tax rate.