Where Should Investors Hide Amid Tension Over Syria?
Today the world is coming to grips with an escalating conflict in Syria (and potentially between the U.S. and Russia) over U.S. Secretary of State Kerry's assertion yesterday President Assad used chemical weapons in Damascus last week. Global equity markets as of 9 a.m. ET tell the story:
U.N. inspectors will once again today attempt to enter the scene of alleged chemical use, having called-off yesterday's attempt under sniper fire. Coupled with President Obama's decision two weeks ago to cancel his planned September meeting with Russia's President Putin over unrelated civil rights issues, confusion rules the day. No definitive proof of chemical weapon use... no public dialog between superpowers... no clear solution.
Today we seek to answer one question on behalf of investors:
Let's consider what's happening mid-morning:
--Gold and oil are up... but they are volatile longer-term.
--Bonds are up too... but longs face a Fed poised to taper.
--The dollar was up... but gains were short-lived.
This leads us to the relative reliability of dividends, coupled with dividend growth. While not a panacea, cash flow helps us ride out volatility and stay closer to home. Today's screen narrows the S&P 1500 according to three simple criteria:
Only nine companies made the cut, proving safety is highly elusive. We also note the group is up this year in-line with the S&P 500 (15 percent), so the added margin of safety isn't handicapping returns.
For blog readers who prefer cash to cash flow, three money market ETFs offer the ultimate safe haven:
--iShares Short-term Treasury Bonds (SHV)
--SPDR Barclays 1-3 month T-Bills (BIL)
--PIMCO's actively managed enhances short maturity fund (MINT)