I like dividend stocks , up or down you still get payed .

Loading up on AGNC and NLY .

As an agency REIT, AGNC Investment bears almost no credit risk. If the borrower doesn't make the mortgage payment, the servicer or the government will ensure that AGNC gets paid. These sort of securities trade in a very liquid market, and generally are low-volatility assets.

With the positive COVID-19 vaccine announcements, subsequent FDA emergency use authorization and rollout to healthcare workers and high-risk people, we have been experiencing a big shift out of growth stocks and into value stocks. These are the stock that did not participate much in the rally that started following the market crash in March this year. In fact, these same value stocks have been out of favor for decades, and they still have a very long way to go. Typically, when value stocks start outperforming growth stocks, this is a cycle that lasts for many years.

Thankfully, many of these value stocks are high-dividend stocks. They include mREITs, BDCs, utilities, quality midstream, CLOs, and some sub-sectors of Property REITs which have been rallying. While not all property REITs are seeing strong momentum, I fully expect that this sector will see a big surge by the beginning of 2021. Our portfolio is overweight all these sectors and making us well positioned to ride the "value rally" while collecting high yields. We have have been beating the general markets since October by a wide margin. I expect the same for the next 24 months to achieve superior returns and lots of income.

One of our biggest gainers have been our preferred stock and baby bond picks as yield hungry investors have been pouring money into these high yielding fixed income investments. These are ideal for lower risk investors and retirees who are looking for high income with lower price volatility.

The Main Driver for Higher Equity Prices

I know that many investors are seeing the markets at all-time highs and are hesitating to put new money at work. I will explain again the main factors driving equity prices and why I am personally fully invested in our dividend stocks, and would recommend the same for our members.

I have been emphasizing the excess liquidity as the main driver for the market rally. In fact despite the recent rally, it is estimated that there are still over $4 trillion dollars of cash on the sidelines parked in cash, CDs, money market funds and treasuries earning next to nothing. Much of this cash on the sideline will find its way to equities, thus supporting higher equity prices. This excess liquidity coupled with all-time low interest rates, and a loose fiscal/monetary policy, are all strong tailwinds for equity investors.

All the above have created a low volatility environment as we have been seeing lately. Every pullback, no matter how shallow, has been countered by investors "buying the dip". The continuous all-time highs we are seeing are fully justified.

As far as valuations are concerned, relative to the state of interest rates, we are far from being over-extended. Even Fed Chairman Powell said during a news conference on Wednesday, that the low rates are helping justify an equity surge that has gone on largely unabated since the March pandemic crisis lows. While many market pundit keep warning us that there is Euphoria (or excess optimism) in the markets which could lead to a short-term pullback, a closer look at data suggest otherwise. Retail investors are optimistic about equities, however data suggests that they are still not putting much of their money to work. What investors feel and what investors do are two different things. Thus the theory of "excess greed" is not justified.

As we head into the year 2021, we are set to see a lot of fuel added to the equity markets. We should anticipate that more buyers come back into the market due to stimulus and of course the fact that the beginning of year is typically one where fund managers put money to work. This rally is set to continue strong.

S&P 500 Trading Range

As stated in many of my market updates, my next target for the S&P 500 index is the 4000 level, then the 4300 level which we are likely to see in by mid 2021.

While it is very possible that the markets could correct, we have to keep in mind that we are in a full blown bull market. The likely scenario is that it will do so at higher prices than we are seeing today. This means that for those who are looking for a pullback to buy the dip, you might be missing on dividends, and may not see the current prices being offered by the markets today. Instead, I suggest that we focus on the longer term which is bright, with substantial gains ahead if you are well positioned based on our recommended picks and the right allocation. Here, I would like to remind our members that we are still recommending a 45% allocation to fixed income and 55% to equities as part of an strong income generating portfolio.

If we pull back in the short term, the support for the S&P 500 index is at the 3600 level. There is even much stronger support at the 3500 level, which would make any downside risk very limited. For value stocks, the downside risk is likely to be much lower today. Again, as we might pull back at a higher level and that would put the support levels also at a higher one than the figures mentioned above.

The Bottom Line

For all the reasons above I like to remain loaded in in our dividend stocks picks that fundamentally superior and trading today at cheap valuation. It is not too late to join this rally as we are at still at its early innings. The future is bright for the investor with a horizon of 2 years at least.

The Santa Clause rally has begun and the Biden post-election returns have been spectacular ~ 9.5 % since election day.

From CNBC today: "Totally 70% of millionaires count on the S&P 500 might be up no less than 5% subsequent 12 months, in accordance with the survey of households with investible belongings of no less than $1 million. Practically a 3rd of these polled count on beneficial properties of no less than 10% in 2021, in accordance with the survey."

Thoughts??

oh yeah that commie isn`t even president and it`s a Biden post election return?? More like Trump came thru with a vaccine returns.
Can`t wait till that old dip$hit communist gets in , $5gas prices here we come and the market is going to $hit. Communists are not good for any free market.
Pull your money soon

Pfizer didn't take a penny of government money on the development or manufacturing of the vaccine -- entirely self funded--Trump played golf and spent time on twitter.

pfizer sucks ass...there $hit stock wouldn’t go up even if they solved world hunger. 😂😭

What do you all think will be leading picks for the next quarter?

Ammo and gun companies? All ammo is gone and my gun stores looks like it got robbed. Everything is gone. I`ve never seen shelves this empty in my lifetime.

https://www.bloomberg.com/news/artic...nkruptcy-court

I see Vista outdoors is one of the bidders, they have a one billion dollar backlog of ammo orders.
Bought some a month ago and it`s up 17%