Stepping In Staples
With the market getting clearer, I'm going to buy two fairly boring stocks that should be able to beat cash. I'm going towards boring stocks right now because many of them have been cast aside in favor of growth and momentum, which creates a potential opportunity. I admit it's too soon to be rushing strongly towards safe, cashflow stocks but these are also potentially the times when you get the best prices. Once economic worries hit the conversation, there's a good chance these names will already be on the move.
First, I'm buying a 3% position in Diageo (DEO,) the maker of Guinness and a wide variety of hard alcohols. There are some tariff worries, here, but it should be able to be handled OK. On their last call, they said second half sales should improve. With the stock down 40% over the last three years, this quality company is already discounting a lot of potential problems.
Second, I'm buying a 2% position in Clorox (CLX.) They're still suffering from high rates and too much inventory but both of those are likely to change in the months to come. Once rates fall and recession fears rise, this should do well. I'm a bit nervous about guidance in the next quarter but this seems like a decent time to buy a small position.
This isn't exactly a generational buying opportunity, with the S&P 500 about 1% off highs, and these don't seem like excellent opportunities. They do, however, seem like good, solid ideas and likely better than cash. I'll take my time putting more money to work and hopefully we can find better opportunities before long.