What? Me Worry?

     Remember Mad magazine and Alfred E Newman? That was his catch phrase. He must have hedged his bets somehow to give him peace of mind in times of turmoil. While I am not particularly happy about the stock market action of the last couple of weeks, I am not about to panic and sell out. What keeps me on an even keel is the amount of  federally insured certificates of deposit that I have bought over the last few years. Even though I may have forgone some potential stock gains by socking money into my local credit union, those funds are insulated from this volatile stock market. When a stock market becomes expensive, it is only prudent to take a more conservative stance. Remember that the long term price-earnings ratio for the S&P 500 index is closer to 15X than the recent 19X. Last year's 3% yield looks pretty good compared to the 1% offered for any new CD term today. With a correction in this market of about 20% or more, I am looking to direct any CD maturities into stocks with low debt, low multiples (12X or less), high dividend yield (5% or more), and large market caps. I  am placing limit orders for some of these stocks that may be executed on the next leg down. While I don't expect to buy at the bottom I feel like over the long term,what I buy at these lower levels will make money. Another reason not to worry is that with such low interest rates, investors almost have to risk money in dividend paying stocks to get a return. This is the TINA theory (There Is No Alternative) to stocks. While the corona virus will change some consumer behaviors for years to come, stocks that will benefit from these changes should be on your radar screen. Technologies that allow people to work from home, enjoy movies without leaving the house, order groceries and drugs online, enjoy home delivered meals, and shop and bank from home should recover quickly.  At the same time that the corona virus is wrecking portfolios, the price of oil has collapsed which may cause many American oil companies to file bankruptcy. When this health emergency and financial crisis ends, and there will be an end, Americans will enjoy much lower fuel costs in the future. Talking about risk and then actually experiencing a gut wrenching market decline like we are experiencing now are two very different things. Five years from now I plan to see a stronger healthcare system, a stronger financial system, and a healthier personal portfolio.