Wow, what ride the last few weeks have been in the markets! Gold got pummeled, interest rates on bond shot up, the market tanked on comments by the Fed and the DJ 30 Ind. saw something like 14 days of 3-digit swings in the last month. No wonder some many everyday investors are running for cover. Oh yea, I don't want to forget the Russell Index adjustments that hit the market in the last 10 minutes on Friday that really drove the markets down. Heck, even some of the big players were ducking for cover. As for me, I sat quietly through it chanting my favorite mantra, "Don't panic, calm is your ally, there is profit in chaos!"
In the way of news, DUK announced it is increasing its dividend from $0.765 to $0.78 per share or about 2%. A number of brokerage firms up graded IAG indicating they believe gold has bottomed out. Although I will remind you that gold and the gold mining stocks will continue to be incredibly volatile and carry a risk factor well above average.
With all of that being said, my model tagged another buy for the portfolio. General Electric, GE, floated to the top of the list. It actually popped on top of my list before all of the recent market mayhem of the last couple of weeks. GE management has the company in a very good position to keep moving forward after having weathered the faltering economy of the last several years.
GE is a true multi-national conglomerate with a broad spectrum of business segments covering everything from consumer loans to the manufacture of turbines (from airplane engines to power generating turbines for utilities, from appliances to light bulbs.) It's exposure is world wide.
Now, GE doesn't have the typical tangible book value to price ratio I like too see, in fact it's book value is only about $3.61 versus it's price of $23.19 (close June 28) but its fair market value is $23.70 according to analysts' reports. The stock also carries a 3.25% yield with long track record of payments and yield increases.
For the most part, GE missed out on the rally earlier this year but it also did not get pummeled as bad as the rest of the market over the last two months. Given its wide diversity of businesses, GE is positioned very well to take advantage of any world-wide economic improvements in the foreseeable future. Come to think about it, if you look at GE's key statistics, I'd have to say GE is a boring stock but it is steady as the rock of Gibraltar. Check the numbers out for yourself.
General Electric GE - 1 Year Prices
The bottom line of the whole thing is we have a very reliable stock that is a steady performer and has presented a buying opportunity. Having said all of that, I am going to add 200 shares to the Magic Money Portfolio.
07 June 13 - 1000 shrs IAG @ $5.29 per share. (BUY)
13 June 13 - 500 shrs AA @ $8.20 per share. (BUY)
21 June 13 - 100 shrs DUK @ $65.58 per share. (BUY)
28 June 13 - 200 shrs GE @ $23.19 per share. (BUY)
28 June 13 - IAG traded ex-dividend $0.125 per share
Magic Money Machine Portfolio (28 June 13)
Cash: $ 29,424.00
1000 shares IAG- $4.33 $ 4,330.00
500 shares AA - $7.82. $ 3,910.00
100 shares DUK - $67.50 $ 6,750.00
200 shares GE - $23.19 $ 4,638.00
Total $ 49,052.00
(1.90%)
Pending IAG Dividend disbursement. $ 125.00
Effective Total $ 49,177.00
(1.65%)
Please not that the account will not receive the IAG Dividend until July 17th at which time we can add it back into the cash balance.
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