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☕ Two dividend stocks to buy if you fear a selloff

Jun 24, 2024

Good morning! 👋

Split markets today in the early going.

The Dow and S&P 500 are both higher, but the Nasdaq is down as I type.

Makes perfect sense.

The official story is that traders are “rotating” out of red-hot tech stocks into other companies.

Sorta.

The S&P 500 has notched 31 record closes this year and is up nearly 15% YTD.

The big money is simply taking a pause for three reasons:

We’re coming up on the end of Q2 so taking profits means big bonuses for those who have ‘em.
At the same time, the risk pirates have a ton of options on the table and those will either get rolled or vaporized.
And, not to ruin your Monday but we’re also just ahead of the 4th of July at a time when terrorism risks are higher than they’ve been in a while so traders are simply taking their chips off the table.

Don’t let that throw you.

The go-fast crowd has the attention span of a gnat so they can’t see the bigger picture and opportunity their actions create.

That's why the smart thing to do at times like the present and especially as we enter mid-summer trading conditions is to focus on moves that create stability AND profit potential.

Ideally in the same stocks.

Here’s my playbook.

1 – Two stocks to buy if you fear a selloff

Many investors fear the downside but what they don’t realize is that it can be an incredible opportunity. Especially if you zoom out with low-beta, high dividend growth choices.

Defense stocks are a great example right now. (Watch)

Keith’s Investing Tip: Dividend stocks tend to fall less, stabilize faster, and come roaring back more quickly than their non-dividend paying counterparts. That's why they’re a great place to hang out if you’re in search of stability for whatever reason. And, not for nothing, if you like cold hard cash the way I do. 😊

2 – Nvidia who?

I find this really interesting.

CNBC reported this weekend that Nvidia remains a relatively unknown brand despite having briefly surpassed Apple and Microsoft to become the world’s most valuable company. (Read)

Apparently, Nvidia is so unknown it didn’t even crack the top 100 brands according to Interbrand’s 2023 list of global players.

Honestly, I’m not sure if that’s a testimony to ignorance or the fact that Nvidia became so valuable so fast that consumer awareness hasn’t caught up.

My guess is the latter.

I expect that to change markedly by next year in much the same way that Intel changed the world with “Intel Inside” years ago. Interbrand also notes that Nvidia’s brand awareness has 4x’d over the past 12 months.

$200 - $230

MyPOV: People who are grousing about the stock pulling back a few percent ought to have their heads examined. It’s returned 185% over the past 12 months, even after all the selling. The S&P 500 turned in 27.78%.

3 - Get ready for another earnings season

I can’t wait.

The usual debate is going to be front and center... will big tech and the so-called “Magnificent 7” have a great earnings season or not?

I’m in the “will” camp.

The whisper numbers suggest growth could come in a whole lot stronger than people expect. Exactly as it has for the past several earnings periods.

What’s that mean for your money?

Here’s the thing.

People are not focused on the fact that this earnings season won’t be evenly distributed.

In fact, I expect to see a lot of companies (outside the Mag 7) stumble badly which, counter-intuitively, will force more money into the Mag 7 further narrowing the markets.

The bears will harp on that as a bad thing but what they do not realize is that AI and big tech will continue to “pull” the markets along, even in sectors that aren’t usually thought of as beneficiaries.

In other words, all that “selling” people are worried about is yet another setup being perfectly orchestrated by Wall Street’s merry marauders.

Learn to think like a shark, not a minnow.

Your portfolio will thank you for it.

Keith’s Investing Tip: I learned a long time ago from one of my mentors that you can a) wait this out in which case you’ll be guessing and potentially miss the lion’s share of the next big upside move or b) make some smart bets now using tactics to control your risk in which case you’re ahead of the crowd. I know what I’ll be doing and buying later today; hopefully you do too!

4 – Target + Shopify = Me, too

Amazon and Walmart have carved up online sales.

Target wants in. (Read)

And has selected Shopify as a way of driving online traffic as it tries to hang on.

Management thinks that Shopify will expose Target’s customers to exciting new stuff that benefits buyers while the company gets a slice of profits as it generates ad revenue.

I wouldn’t bet on it.

If something’s “free” then YOU and I are the product. No thanks.

Target is the weaker horse here in a race that’s already substantially over.

There are much stronger retailers out there including my fav, which has returned 126.44% over the past 3 years while Target has lost –31.87% over the same time frame.

Keith’s Investing Tip: Great stocks lead and stocks that stink follow. (Watch) The question you want to ask yourself is whether or not you own enough of the right stocks and what it will take to move ‘em forward.

I’ll be here if you’d like some help. (Upgrade to Paid)

5 – Way ahead of itself

I love the concept.

Newly public Nano Nuclear Energy wants to develop micro-reactors – aka tiny shipping container sized nuke plants – that could power particularly remote sites or specific use cases like data centers, mining projects, disaster relief efforts and more.

It IPO’d this past month and shares are now ~$20.

While I applaud anybody with the guts to hang on, I think Nano is so far ahead of itself that it makes GameStop look positively pedestrian.

Don’t get me wrong, I like what the company’s doing and why it’s doing it.

I’d love to see it succeed.

Technically speaking, the stock is waaaaaaaay ahead of itself considering that it doesn’t expect to commercialize operations until 2030. There are no put options yet available (because the stock recently went public) but I’ll be watching for ‘em.

Thinking we’ll see $10 or so as the excitement dies down and reality sets in.

We'll see.

Admittedly, it could be a while because everybody’s imagination is in high gear.