Investing is hard, and the biggest impediment to success is usually your own emotions. Which is why it can be hard to buy when a stock is cheap, since other investors are selling. There are ways around this difficulty if you focus on good companies with long and strong business histories. Here's why I bought Unilever (NYSE: UL) this year and why I'm buying more Procter & Gamble (NYSE: PG) and Hormel (NYSE: HRL) .
Unilever stock was recently off its highs by around 15% so far this year. While part of that is market-related, given that we are in a bear market , a lot of the downdraft is related to company-specific issues, like slow growth and management missteps (an ill-advised, and failed, acquisition attempt, for example). I bought the stock anyway, noting that the over 4% dividend yield on offer here hasn't been at levels like this since the Great Recession .
The key for me is that Unilever is an over-100-year-old consumer staples giant that has proven it can stand the test of time. Its business is underpinned by iconic brands, like Dove and Hellmann's, that consumers tend to buy no matter what's going on in the economy or the market. And the company isn't sitting on its laurels as its business deals with weak growth; it is making changes to get things back on track. That includes revamping the management structure to increase accountability and working with an activist shareholder . So not only do I believe Unilever is taking steps to fix things, but I also believe its business affords it ample time to do so.
For further details see:
Stock Market Plunge: Why I'm Loading Up on These 3 Stocks