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One of the few sectors that are worth looking into during this bear market is the utility sector.This is because just like food, utilities are a necessity even during a bear market.

While its possible that people might use less energy these days, still most will use the normal energy needs on a day-to-day basis. This provides a constant flow of revenue for the utilities. Besides many governments provide help to those who cannot afford to pay their utility bills based on many eligibility rules. Once utilities used to stable long-term value stocks that provided decent growing dividend. Nowadays that is not the case. These stocks are as volatile as any other stock. The sense of stability and consistency that came with this sector is gone. This year utilities seem to fall in synch with the overall market. I believe that the S&P 500 utilities are down over 30% year-to-date. This is very unique since utilities usually stay strong in any market.

However for investors that are willing to nibble in this market there are couple of European stocks that pay high dividends now. Stock price may erode thru the rest of the year if the overall markets fall further.

1.Company Name: National Grid PLC
Ticker: NGG
Country: UK
Dividend Yield : 7.62%

2.Company Name: Veolia Environnement
Ticker:VE
Country: France
Dividend Yield : 7.72%

Veolia used to trade in the 90s. Now it goes for just above $24. Same caution is warranted with this stock. NGG seems to be holding better compared to VE. But both these stocks offer excellent dividends as mentioned above.

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Five Canadian Banks trade in the USA as interlisted stocks. These banks have also been impacted by the credit crunch in the past few months.

The following are the dividend yields for the five banks:

1.Company Name: The Bank of Nova Scotia
Ticker: BNS
Dividend Yield : 6.42%

2.Company Name: RBC Financial Group
Ticker: RY
Dividend Yield : 5.54%

3.Company Name: Toronto-Dominion Bank
Ticker: TD
Dividend Yield : 5.60%

4.Company Name: Bank of Montreal
Ticker: BMO
Dividend Yield : 8.28%

5.Company Name: Canadian Imperial Bank of Commerce
Ticker: CM
Dividend Yield : 8.13%

Until so far Canadian banks seem to have weathered the storm pretty well when compared to American or European banks. However some of them have heavy exposure to the US markets. As the market continues to be volatile it is worth keep an eye on these stocks.

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Photo: Maldives Islands

Guest Post:

When Paulson came out today and stated that his earlier plan to save the western world was not working, he offered up a plan “C” (or is it “D”) to relieve pressure on consumer credit, scrapping his earlier effort to buy the value mortgage assets.

No matter what happens or what the next plan is here, are the 3 reasons I believe stocks are headed lower.

* Number one: The trend in most all stocks is down. This trend is likely to persist and last longer than most people imagine.

* Number two: There is no plan. The government is floundering and does not have a plan that is going to work anytime soon.

* Number three: We have a lame-duck president, and nothing is going to happen of any consequence until President-elect Obama is sworn in.

New Video analysis of what could really happen:

http://www.ino.com/info/259/CD3196/&dp=0&l=0&campaignid=3

Okay, so let’s look at the first problem. Most people trading the market today have had no experience in a prolonged bear market like the one we had in the ’70s. That bear market was brutal as it did not let anyone out. Over the course of the early ’70s, the bear market basically wore people out to the extent they eventually just threw in the towel. We believe the market is going to make another new low and take out the recent lows that were put in place in early October. Unlike a bull market that constantly needs positive news to drive it higher, a bear market just falls under its own weight.

The second problem we have is that there is no concrete plan in place to rescue the economy. In fact, the domestic and global economic issues are so great that they are overwhelming in scope. The Paulson plan, which is being changed and will continue to change, is a major concern and creates significant uncertainty in the marketplace. Only when we see the new regime take! off ice this coming January will we see any meaningful changes.

The third problem we have is a lame-duck president. This is a major problem for the markets as President-elect Obama can not make any sweeping changes until he is sworn into office. Yes, he may hit the ground running, but the reality is, it’s not for over two months from now and a lot can happen to the market in two months. The key levels that everyone is going to be watching for are the recent lows we saw in early October. If these lows are taken out, and I expect they will be, it’s going to push this market and everything else down to new lows. It will exacerbate the housing situation, the unemployment situation and most of all, the morale of the country.

Having lived through the bear market of the ’70s, I know firsthand how difficult the journey we face is going to be. Now this may seem like a very pessimistic outlook and in some ways it is, however there are always opportunities to make mone! y i n the marketplace. These opportunities may not be in stocks! , it may be in forex or the commodity markets.

So buckle your seatbelt. I think we are in for a bumpy ride…check out the new video analysis:

http://www.ino.com/info/259/CD3196/&dp=0&l=0&campaignid=3

Also checkout:

Dollar…Stocks…Crude…what’s next?

http://www.ino.com/info/259/CD3196/&dp=0&l=0&campaignid=3

Adam Hewison,
President, INO.com
Co-Creator, MarketClub

written by admin