XLV - Buying Value The Smart Way - 3 Fantastic Dividend Stocks To Buy Now

2024-06-19 07:30:00 ET

Summary

• In a challenging market, I recommend a defensive strategy focused on quality stocks at deep-value prices. High S&P 500 valuations suggest subdued returns, emphasizing cautious investing.
• The AI-driven rally has skewed expectations, benefiting a few stocks. Despite early underperformance, I believe in the long-term potential of value investing based on historical trends.
• Focus on companies with strong fundamentals, consistent dividends, and growth potential. This approach offers stability and outperformance in a demanding investment landscape.

Introduction

In early December, I had the honor of presenting my 2024 outlook in a Q&A-style article titled "2024 Analyst Outlook: Leo Nelissen On Staying Defensive In A Demanding Investment Landscape."

One of the most important things I discussed in that article was my belief that future returns may be subdued.

Looking at the (updated) chart below, we see that current S&P 500 (SP500) valuations suggest subdued annual returns over the next 1–5 years (and potentially beyond).

This is based on the historically proven fact that investors who buy the market at a low valuation tend to enjoy higher future returns than investors who pay above-average prices....

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