The decided tendency of a vast majority of investors is to greatly understate sensitivity to risk. Most investors work off a “buy high, sell low” emotionally-charged template that is a bear to dismiss.
A number of hurdles must be conquered before a suitable goal-oriented investing plan can be put in place. Clearly, the subject of risk sensitivity must be addressed first, followed by some homework on portfolio activity, patience and compound interest. Once satisfactory common ground is achieved, it is time to determine targeted returns.
The first place you want to look when determining returns is the prevailing level of interest rates and dividend yields. Again, history clearly supports the wisdom of a diversified, balanced portfolio of stocks and bonds.
For all practical purposes, today’s interest rates are basically zero, and stock market yields are in the 2% range.
Indeed, the economy is in the winter stage of a business cycle recovery, and without the massive artificial stimulus in the form of Federal Reserve money printing, it would have already sunk back into recession. As we all have learned painfully through the years, recession is the bedfellow of falling stock prices.
In the current market conditions, I recommend the following five stocks to buy:
5 Stocks to Buy: General Mills, Inc. (GIS)
I’m now exclusively recommending stocks that have increased their dividends for at least the last 10 years. General Mills, Inc. (NYSE:GIS), with 12 years of consecutive dividend increases, is a recent addition to that list.
General Mills yields 3.13% today. As you can see on my price chart, GIS shares have experienced strong price increases since 2013, but the moves haven’t been radical by any means. GIS stock is trading near its long-term trend levels, and price growth has been slightly less than average over the last year.
Throughout its history, General Mills has produced and sold everything from Nerf balls, toy trains and Care Bears to Lacoste clothing and torpedoes. Today General Mills is a pure food company and owns some of the world’s best brands. Cereals like Cheerios, Chex, Kix and Wheaties just scratch the surface.
Don’t miss the boat. Buy General Mills today.
5 Stocks to Buy: Linear Technology Corporation (LLTC)
When the CEO of Linear Technology Corporation (NASDAQ:LLTC), Lothar Maier, was asked why LLTC has the highest operating margins in its industry, he replied with an answer that gives investors — not speculators — a reason to pay attention.
Linear develops completely new products, not copies of its competitors’ products, and doing so requires a business horizon of at least five years: two or three years for development of Linear products, and another two or three years as the customer develops Linear’s product into its own. This long-term focus is the antithesis of the Wall Street short-termism, which I warn you against.
You can see on my price chart below that Linear is consolidating around $46. Don’t allow inertia to hold you back; buy LLTC today.
5 Stocks to Buy: Target Corporation (TGT)
So-called Millennials are moving to the city and leaving suburban sprawl behind them, along with most of the big-box stores that were built to cater to their minivan-driving parents. Target Corporation (NYSE:TGT) is combating urbanization by following these young people back to the city centers.
This year, Target will open 15 new stores, and two will be TargetExpress stores built in San Francisco. These TGT stores will prominently feature Target’s “Made to Matter” product offerings that are mostly natural, organic and sustainable brands.
Don’t wait to invest in Target stock. My price chart shows a dip in shares below Target’s 50-day moving average. Buy TGT stock.
5 Stocks to Buy: CVS Health Corp (CVS)
It’s easy to understand the impact of 7,800 retail pharmacies on CVS Health Corp‘s (NYSE:CVS) business, but the largest revenue driver at CVS is actually the pharmacy services segment. The business offers a full range of services like plan design, Medicare Part D services, mail order, clinical services and more.
This out-of-sight business generated nearly $24 billion in revenue in the first quarter alone. Don’t be complacent when it comes to adding CVS stock to your portfolio.
My relative strength chart shows a strong trend for CVS compared to the market. Buy CVS stock now.
5 Stocks to Buy: Medtronic PLC (MDT)
Today, you can control your lights, thermostat, television, washer and dryer and nearly every other appliance or device in your home or office from your smartphone. In the process, those devices can send you mountains of data about what your house is up to, whether or not you’ve left the door unlocked and any other measurable fact that interests you.
It is undoubtedly a great idea to apply that kind of data collection to medical devices, and Medtronic PLC (NYSE:MDT) is working with International Business Machines Corp. (NYSE:IBM) and its Watson supercomputer to develop devices and data analysis that break ground in diabetes treatment research, feeding data directly back to researchers from the patients.
My relative strength chart shows you Medtronic’s strong trend since 2012. Don’t miss out — buy MDT stock today.
To get the rest of Dick Young’s top stocks to buy this month for stability and long-term dividend growth, sign up for his newsletter, Intelligence Report.