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Taking advantage of market volatility – A winning recipe

Today's Financial News - Posted September 27, 2008

Andy Snyder on Smart Trading

The global economy may be a mess, but it is creating some unique profit opportunities. Andrew Snyder of TFN names Altria (MO), Microsoft (MSFT), and the Vanguard Short-Term Bond Fund (BSV) as investments to take advantage of market volatility and boost your profit potential.

Watch the video now.

Baltimore (TFN): As Wall Street runs red, leery traders and investors have been watching their portfolios turn to red.

I’ve asked various experts after the past weeks where they believe we should turn to build and/or protect our wealth. Their responses have varied from shorting strategies to treasury bonds to investing in the U.S. dollar.

Today I’ve invited Andrew Snyder – newly returned from the wilds of Alaska to rejoin the TFN team – for his valued opinion.

Welcome back, Andy!

Wall Street has a real mess on its hands. Some of the world’s largest financial companies are collapsing and they are dragging the American economy with them. How do you think this will all play out?

Andrew Snyder: Well I think it is a real mess and it’s going to be a topsy-turvy market for quite a while; probably two to five years. The next year’s going to be pretty wild. You’re going to have to put a seatbelt on and wear a helmet to work each day, but I think we’re going to get out of this just fine. We’re used to a cycle of big bubbles and big recessions and it’s nothing that we can’t get out of and keep moving forward.

Laura Cadden: So you think the bearishness phase is going to come to an end. We’re going to go into positive territory. So what should investors do now?

Laura Cadden
Watch this video.

Andrew Snyder: Well right now they need to be making sure their portfolios are fully balanced. That means proper cash assets, proper allotment of bonds and plenty of equities in there. There’s some fantastic stocks out there trading at dirt cheap levels. They were drug down by all the financial mess and they’re going to come back up and that’s how you’re going to make your money.

Laura Cadden: So the stock market still. Still think we should stay in there. Are there specific stocks that you like?

Andrew Snyder: I really like Altria right now; symbol MO. You probably know them better as Phillip Morris. They own a 20 percent stake in Miller, the brewing company. They also have some wine offerings, some cigars. It’s a good company. Everybody’s still out there with their vices and their revenues are good. Their dividends stream’s good. They pay a healthy dividend; right about four percent right now. That’s not going to go away anytime soon.

Then there’s Microsoft who just announced a $40 billion buy back program that’s going to put a technical floor on share price and lots of money’s going into the technology firm. You can’t bet against the world’s largest software manufacturer.

Laura Cadden: Oh, they sound good. You also said bonds. Are there any specific bonds you think people should turn to?

Andrew Snyder: There’s lots of good bonds out there right now. With the turmoil in the cash markets, the short term bonds have been really making the news lately. There’s a short term bond fund offered by Vanguard. It’s symbol’s BSV and it pays another four percent payout each year. It’s a good fund. It has some good appreciation potential as those bonds go up in price and the yield’s going to remain strong. So it’s a good fund.

Andrew Snyder writes for Hot Stock Confidential. Learn more about his service here.

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Next Article: Big Movers: Keep your eye on Wachovia (WB), Wells Fargo (WFC) and Citi (C)

Posted by Laura Cadden · Filed Under Featured Video, US Stocks and Markets, Videos 

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