An ETF to Bypass the Fiscal Cliff
This exchange traded fund is a good choice for income investors looking for a soft landing if US politicians can't figure out how to stop a slide over the fiscal cliff, writes Bryan Perry of Cash Machine.
Clearly the biggest surprise of 2012, in my view, has been the performance of European markets that have so far returned more for investors than US markets. I would have been hard-pressed to find anyone who would have put money on that idea. Despite all the video of riots in Greece, protests in Italy and strikes in Spain-coupled with the dire warnings of further economic contraction by the ECB for the region-European stock indexes are telling another story.
If it's true that stock markets trade according to what the next six to nine months are going to look like, then investors should be encouraged to be putting together a shopping list of high-yield companies and ETFs to consider owning once we get over, around, or through the cliff episode that has us in this chronic waiting period.
I had noted late in the summer that Warren Buffett had already started to show interest in a short list of stocks. The names remain undisclosed, but it's safe to say that they comprised some of the bluest chip names over there.
Some household names have led those markets out of the ditch, and we were involved in a few of them within the last year: Roche (RHHBY), Unilever (UN), and GlaxoSmithKline PLC (GSK). Other stocks like Nestle (NSRGY), Sanofi (SNY), British American Tobacco (BTI), Novo Nordisk (NVO), SAP (SAP), and some of the big insurers like AXA have been on a bull run of late as well, and are also helping to lead the way higher.
When it comes to truly higher yields, though, we would have to consider Banco Santander (SAN), the big Madrid-based bank with global operations and a dividend that yields 8% after being cut earlier this year.