Wednesday, September 29, 2010

Quick update

September has been much better than I dared to hope for. October is the last of the annual scary months and I don't mean Halloween.  So if you like me have increased your cash position for this scary market time, now is the time to start looking for bargains.

Microsoft is such a bargain. Also look again at Canadian banks they have settled back and are still yielding above 3% with likely a dividend boost in the coming two quarters. Inspite of these latest sunny days, do not lose sight of caution and focus on quality companies with solid dividends. Preservation of capital should remain closely to the core of your investment strategy.

After October, the investor crowd may get excited again. Don't get caught up in it. We're still in a lot of trouble. Better to buy early than trying to keep up with a fall rally, and with the focus on dividend income you'll do fine even if the late year rallies would stay away. My guestimate is that we might get quite a vigorous rally and that the upbeat mood is likely to last until February. This may become a period of overconfidence; don't get caught up in it and keep a lot of your cash powder dry.

Alberta should start to economically perform well next year. If you plan to buy real estate consider buying between now and the spring. After March you may buy into a rally. If you want to sell properties hold off until the spring (opposite to the buyers).

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