Global equity markets have taken a rough down turn since February’s 28th global panic attack. Investors can look at these losses in two different ways:
- Stocks are now risky and volatile.
- Stocks are on sale.
I would have to agree with the latter. Stocks trade in a marketplace, surrounded by constantly changing environments. Domestic and International stocks were due for a correction at some point; just so happens that some point is “now.”
The March Dow Jones Sale
Bargain stock hunters will be lurking as the current downtrends continue. So, why not get in on the fun? You can pick up some DJIA bargain stocks on the cheap. The easiest way to do so is using a stock screener. After messing with Yahoo! stock screener, I have compiled a nice shopping list of investors based on P/E Ratio. While P/E ratio represents only one of the many stock valuation factors, I believe it’s a good starting point since investor dollars will be flowing into large-cap stocks under current market conditions. Historically, large-caps are less volatile than small or mid-caps, and when investing in an indecisive market, bigger is always better.
Dow Components with P/E Ratios under 15
| Company | P/E Ratio |
|---|---|
| Citigroup (C) | 11.60 |
| Altria Group (MO) | 14.40 |
| Dupont (DD) | 14.80 |
| JP Morgan Chase & Co. (JPM) | 12.50 |
| 3M Company (MMM) | 14.40 | Home Depot (HD) | 13.90 |
| Alcoa (AA) | 12.90 | Caterpiller (CAT) | 12.20 |
| Exxon Mobile Corp. (XOM) | 10.60 | AIG (AIG) | 13.00 |
Note: P/E Ratios are subject to change depending on current market activity. In order to provide you with live quotes, I’m working with Yahoo! Finance API. Live Quotes will be available soon!
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{ 4 comments… read them below or add one }
Seems you used trailing earnings. The numbers for US large caps looks even better if you use forward earnings. You’ve also put together a nice basket of high dividend stocks. I’ve been looking at a similar trade myself.
I find it VERY hard to believe that you think that things are on sale, especially being just over a week since a index breakdown.
From a technical standpoint, we are still in a correction/pullback mode. Usually during bearish conditions, things can be very erratic.
I would not be looking for sales just as yet.
Just look at the $vix - I would be bracing for further downturn.
you were right about the index correction. The only reason I added to my stock positions was because early March offered some of the best prices since September for a number of my holdings. Since I’m in it for the long run, it only made sense to dollar cost-average and increase my holdings.
When do you see this index correction ending? What would be the catalyst?
Looks like you blew it