By Nigam Arora
The stock market, it seems, has been going straight up. And now the market is expensive.
Make no mistake about the real reason for the market’s rise. This chart shows that stocks are moving up in lockstep with the Federal Reserve printing money. And the momo (momentum) crowd is following along obediently.
In this situation, what is a conservative investor to do? Is there anything left to buy?
No worries, there are many strategies that conservative investors can use. Intel /zigman2/quotes/203649727/composite INTC -3.29% shows the way. Let’s explore with the help of two charts.
Please click here for an annotated chart of Intel that was published in 2017.
Note the following:
• In 2017, I was getting emails from investors similar to the ones I am getting now. The stock market had been going up for eight years. Conservative investors were trying to figure out what could they buy that was safer.
• The Arora Report took a position in Intel with an average price of $34.01. Subsequently we repeated the same call several times.
• The first chart shows the breakout in Intel from a triple top that provided investors with one of many subsequent opportunities to buy Intel stock after our initial buy call.
• At that time, Intel stock was inexpensive, had a nice dividend, a rock-solid balance sheet and a dominant position in the market. Many gurus had sell ratings on Intel.
• The second chart compares Intel to AMD.
• For the period shown in the second chart, Intel shows a price return of 134%. In addition, there have been significant dividends. This includes the big bear market of 2008-2009.