My thoughts are that if I think about the market I'm wasting my time. Sheep think about the market.
Can't find a link, but I just saw a story on Bloomberg about how companies with high debt levels have outperformed over the past few months.Brad911 is a value investor and he says it is all about the debt. I happen to agree with that even though value stocks were stomped on last year, much to my surprise, along with everything else.
I think besides gold going up because of the lack of confidence in fiat currencies, value investing will make a come back. I personally don't like waiting for the value to come to light so I like playing the ups and downs a little more. But if you want to buy and hold in this market then you should be buying strong companies with little debt ready to ride out any storms.
Congratulations on getting RY at $38. It was a good move on your part...Canadian Banks are the envy of the world, and RY is one of the best. Yes, banks are no longer cheap and I would be hesitant to add more for the time being, given some headwind with growing loan losses this year and 2010...but with the improving economy, steep yield curves and recent securities underwriting activities, banks should do well. I would hang on to RY for the long run, and add to banks when we experience another dip. Perhaps keep new funds for some of the laggards in the current upturn (utilities, telecoms etc.)...as always, due diligence is in order - do your research!I am a new investor in stocks and not experienced at all, but just looking at my RY share now is somewhat shocking to me (got in April for appox. 38$).
The all time high of RY was mid 2007 at 60$ or so... and now mid/end recession we are at nearly 52$ gives me the feeling that RY is overpriced. There is not much air to aim higher- but lots of potential to go down.
I am totally uncertain if I should sell (as I said, don;t see more potential) and bank in the nearly 30% gain
or
keep it for the dividend.
Congratulations on getting RY at $38. It was a good move on your part...Canadian Banks are the envy of the world, and RY is one of the best. Yes, banks are no longer cheap and I would be hesitant to add more for the time being, given some headwind with growing loan losses this year and 2010...but with the improving economy, steep yield curves and recent securities underwriting activities, banks should do well. I would hang on to RY for the long run, and add to banks when we experience another dip. Perhaps keep new funds for some of the laggards in the current upturn (utilities, telecoms etc.)...as always, due diligence is in order - do your research!
Just pointing out that simple tenets like, 'invest in companies with low debt levels' are not a symptom of the time right now, theoretically this is true all the time and everyone knows this. That being said debt is necessary to run a business and a greater amount of debt is necessary to run businesses in certain sectors. Investing like a sheep is never a good strategy. The credit crisis did not and will not kill the usefullness of debt forever. Everything runs in cycles....Moneygardener I would think the companies with the most debt would do well because they are pricing in the better chance that they will survive rather then pricing in thier demise. This however is not a sustainable price rise unless the debt burden is taken down. The strong companies without all that debt were probably already priced to survive.