Our trading restrictions prevent us from adding to our Johnson & Johnson position today, but we would buy 50 shares this afternoon if we could.
The broader markets are taking a beating Friday after the May consumer price Index report — a key measure of inflation — came in hotter than expected. With inflation stubbornly raging still at four-decade highs and calls for the Federal Reserve to act faster to stamp out inflation getting louder, we continue to believe the prudent way to position your portfolio is to focus on profitable companies that can increase dividends, repurchase stock, and trade at reasonable valuations. Profitable, dividend-paying companies tend to generate steady amounts of cash flow, which provides a degree of dependability in an otherwise uncertain economic environment. In addition to this mantra, we have recently leaned harder on companies that will not see their businesses crushed by a Fed-mandated slowdown and higher interest rates — just for these kinds of market days. Some areas of the market that we are invested in and we view as generally resilient to a slowdown are healthcare, oil due to the imbalance of supply, and consumer staples. The economic outlook may be highly uncertain right now, but anytime the S & P 500 is down a quick 6% like it is in the past three sessions, we go on the hunt for opportunities to put a small (nothing aggressive) amount of capital to work in high-quality companies with strong long-term fundamentals that fit our above-mentioned criteria. Which brings us to Johnson & Johnson (JNJ). Our trading restrictions prevent us from adding to our JNJ position today, but we would buy 50 shares this afternoon if we could. As a reminder, we are restricted from trading any stock that Jim Cramer mentions on TV for three full days. But since you do not have the trading restrictions we do, we will always tell you what we would buy or sell and when we would do it.
