13 Firms Hoard $1 Trillion In Cash, Is High Cash Flow Stocks Safer?
China’s largest companies are once again at the center of a market storm.
Three of China’s most valuable businesses -- Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Meituan -- have shed more than $100 billion in the span of three turbulent days.
According to the analyst, Michael Norris, It’s going to be challenging for businesses that rely on consumers and merchant advertising to be able to make this year’s numbers.”
Why Not Focus on High-quality Growth + High Dividends" Sector?
Due to the US inflation, interest rate hikes and recent geopolitical influences this year, it is recommended to focus on the "high-quality growth + high dividends" sector.
The valuations of many industries are still high, and it is difficult to generate excess returns in the period of relatively tightening monetary policy.
Since some funds have requirements for basic positions, it is expected that future funds will still shift to "high-quality" Growth + High Dividend" type of company.
Cash Flow is King: Factors Driving Returns Over The Next Decade
13 Firms Hoard $1 Trillion In Cash.
Just 13 non-financial companies in the S&P 500, including mainly tech giants like $Apple(AAPL)$, Google-parent $Alphabet(GOOGL)$ and IBD Long-Term Leader $Microsoft(MSFT)$, are sitting on cash and investments of more than $1 trillion.
The massive cash pile held by just 13 companies accounts for nearly 40% of the $2.7 trillion held by all of the companies in the S&P 500. S&P 500 companies now have enough cash to give $8,131 to every man, woman and child in the U.S.
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Would you like to continue choose tech giant stocks or turn to stocks with high cash flow and hign diviends?
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A great portfolio would have a combination of Growth stocks and High Dividend Value stocks. Both classes of stocks have different roles to play to achieve the maximum returns long term.
The other important criteria would be Diversification. Diversify into different classes of assets from stocks, bonds, gold and even cryptocurrencies to minimise risk and maximise returns.
Apple, Microsoft and other Big Tech stocks are great choice to hold long term. Even Tencent and Alibaba are excellent choices too. I would hold these stocks long term and watch the magic of compounding happen. 🎉🎊🎉
13 Firms Hoard 1 Trillion in cash
With FED raising interest rates from Mar 2022, and higher rates have traditionally negative for high growth tech stocks, might be wise to rotate and allocate more of the portfolio to high dividend and high cash flow stocks such as the 13 firms. Have a few strategies to profit from the Markets, rather than just a "one-trick-pony" [笑哭]
1. I'm interested in tech so the same for its stock [Grin]
2. May be a bit more risking but returns are higher if predicted correctly [Happy]
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