Posted by
john on Monday, December 15, 2008 2:10:35 PM
Last week on his show, Jim Cramer unveiled his "All-Pro Safety" picks, which focus on yield. As of the airing, these stocks had a collective dividend yield of 7.1%, and, of course, were selected on the premise that the dividends were safe. Here's the list:
BMY
GXP
KMP
NAT
VZ
Notably absent from this list is MO - perhaps Cramer has an aversion to tobacco, but I wasn't aware of that. A few things to thing about regarding this list. First, let's hope the incoming administration isn't stupid enough to raise the tax on dividends. Second, if inflation picks up substantially, the real value of that dividend is going to get whacked hard, though you would hope that this would be offset by increasing share prices (yields are high because prices are low, inflation should be an indicator, at least at first, of an economy picking up steam).
Finally, be aware that I am not a registered investment advisor, am not qualified to give investment advice, and do not own a crystal ball. I am just conveying Cramer's thoughts, which I found interesting. After all, if you want to flee to safety, you can opt for a 3-month at .01%, or a 7.1% yield that probably isn't extremely less safe.