Today, I decided to move 2% of my IRA back into the stock market. To do it, I purchased equal amounts of Altria and ExxonMobil. Although I believe both stocks have the possibility to move lower in the short term, I think they are great long-term investments.
- Altria – great dividend and margins. Low p/e.
- Exxon – when gas prices get close to $1 per gallon, I start to look at moving money into oil stocks. At today's price, I am probably a little "early" to the trade. Nevertheless, lower interest rates make this a risk I was willing to take.
- I don't have the time or skill to evaluate individual bonds with credit risk. As a result, I don't think individual municipal bonds or corporate bonds are a wise investment for me.
- In a low interest rate environment, bond funds are a nightmare. In the short term, the "interest" return is minimal. In the long terms, the principal gets hammered when interest rates go up. Finally, there is ZERO UPSIDE as interest rates cannot go lower. As a result, gains on principle are out.
Next Major Investment: I will probably add to my TIPS holdings at the next auction. Through Fidelity, I can pick them up without paying any commissions.