Moving average crossings are widely used for momentum investing and the golden cross (GC) is the mos...
3 Lessons to Learn From McDonald's Stellar Run
09/18/2020 10:00 am EST
I’m not a big fast-food guy. I prefer home-cooked or fast-casual meals when I have a choice, unless I’m in a huge hurry, states Mike Larson.
But as an analyst, I’m happy to recommend you sink your teeth into fast-food — especially when it’s a stock that ticks off all my “Safe Money” methodology boxes ...
This company has a dividend yield as juicy as a fresh-off-the-grill burger.
It has the financial and managerial wherewithal to keep most of its locations open despite the COVID-19 pandemic.
With new products and new marketing programs it’s going to deliver even-stronger results.
Plus, it has a long history of solid Weiss Ratings (despite a shorter-term, COVID-skewed dip).
And shares are testing all-time highs.
The name is one you’re probably familiar with. But the lessons its performance can teach you are important — never more so than in the current environment.
I won’t keep you in suspense any longer…I’m talking about McDonald’s Corp. (MCD).
I don’t normally cover recommendations that are in my Safe Money Report here. But subscribers have had plenty of time to digest and act on this idea, so I’m making an exception this time to underscore a handful of broader points...
First, there are many, MANY ways to make money in this environment. Think high-quality, high-yielding dividend-paying stocks or precious metals and shares of companies that mine them.
If you know where to look, you can and will find some incredible profit potential.
Second, the financial media often focuses too much on what’s sexy and what drives television ratings. That’s usually tech, tech, and more tech. That’s especially true in this dot-com-like environment for big technology names.
But if that’s all — or almost all — that you own, your portfolio lacks a critical ingredient: DIVERSIFICATION.
You’ll make a lot of money when times are good. Yet you can lose buckets of points the instant those stocks stumble, as they did last week.
On the other hand, Safe Money-style names tend to be much more resilient. Just look at MCD. It hardly missed a beat when tech tumbled.
Third, the success of MCD and other names I’ve zeroed in on stems in part from Federal Reserve policy. The Fed is determined to keep rates pegged to the floor until the cows come home. Policymakers say that’s the best way to support the broader economy.
But we know from years of experience that this strategy mostly fuels asset speculation and appreciation, instead of noticeably boosting growth and inflation. It forces investors to chase yield wherever and however they can find it.
Or in simple terms, Wall Street siphons off most of the benefits while Main Street is left with table scraps.
Is this the way things “should” be? No. But as an analyst, I have to focus on how things ARE, not how I may want them to be. That’s the best way to help you grow and protect your wealth.
Since Jerome Powell didn’t signal a different policy approach at Wednesday’s meeting, it means MCD and other Safe Money investments have a very bright future. Don’t miss out on your chance to profit from them!
Safe Money Report focuses on these kinds of stocks, which include names in the consumer staples, food and beverage, retail, and health care sectors. Subscribe to Safe Money Report here…
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