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2022-05-07

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9 High-Yield Blue-Chips To Help You Sleep Well At Night In This Bear Market

gradyreese/E+ via Getty ImagesThe wild stock market ride in 2022 continues.YChartsOn Wednesday, May

9 High-Yield Blue-Chips To Help You Sleep Well At Night In This Bear Market

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":9066212721,"tweetId":"9066212721","gmtCreate":1651902763463,"gmtModify":1676534995467,"author":{"id":3561201203930690,"idStr":"3561201203930690","authorId":3561201203930690,"authorIdStr":"3561201203930690","name":"Lion91","avatar":"https://static.tigerbbs.com/7ea44be8fbae5e18211977f4b4c51d1e","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":1,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>Like for like</body></html>","htmlText":"<html><head></head><body>Like for like</body></html>","text":"Like for like","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/9066212721","repostId":2233539913,"repostType":2,"repost":{"id":"2233539913","kind":"news","pubTimestamp":1651839340,"share":"https://www.laohu8.com/m/news/2233539913?lang=&edition=full","pubTime":"2022-05-06 20:15","market":"us","language":"en","title":"9 High-Yield Blue-Chips To Help You Sleep Well At Night In This Bear Market","url":"https://stock-news.laohu8.com/highlight/detail?id=2233539913","media":"seekingalpha","summary":"gradyreese/E+ via Getty ImagesThe wild stock market ride in 2022 continues.YChartsOn Wednesday, May ","content":"<html><head></head><body><img src=\"https://static.tigerbbs.com/6c9e5cba011e06e7f7d9fd5aca6e0787\" tg-width=\"750\" tg-height=\"500\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>gradyreese/E+ via Getty ImagesThe wild stock market ride in 2022 continues.<img src=\"https://static.tigerbbs.com/80a1bb2e88cfacad35fade7d6e4450db\" tg-width=\"640\" tg-height=\"387\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>YChartsOn Wednesday, May 4th, after Fed Chairman Jerome Powell took 75 basis point hikes off the table, the market roared higher with the Nasdaq soaring 3.5%.As I write this, the market is down 3.7% and the Nasdaq 5.1%.Bonds are getting crushed and even low volatility stocks are selling off, though just a fraction as much.Why is the market getting hammered today? There is no news to explain it, it&#39;s just soaring interest rates and crashing stock prices.I understand that a lot of investors are getting exhausted by this volatility.It seems historic and in a way it is.<img src=\"https://static.tigerbbs.com/7afc29e391d43e816b6d641e57034359\" tg-width=\"640\" tg-height=\"653\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Charlie BilelloIn fact, it&#39;s the 3rd worst start of the year for stocks in history.But guess what?<img src=\"https://static.tigerbbs.com/91aaea5881a2fe583b6899f459c4e7c5\" tg-width=\"640\" tg-height=\"500\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Daily Shot It&#39;s also a perfectly average correction, just <a href=\"https://laohu8.com/S/AONE.U\">one</a> that&#39;s happening a bit quicker than usual.The temptation to sell everything and hide in cash (and under your bed) might be strong, but as I&#39;ve explained in numerous articles, market timing is a great way to destroy your nest egg.<blockquote>If you try to time the market you&#39;ll churn your portfolio to death.&#34; - Joshua Brown, CEO Ritholtz Wealth Management</blockquote>This article explains why this bear market is normal, healthy, and could end within the next month or so (about 6% lower on the S&amp;P 500).But in the meantime, let me show you how to harness the power of the world&#39;s best low volatility, high-yield blue-chips to sleep well at night, while growing rich over time, in this and all future bear markets.Up 2% YTD While The Market Is Down 15% And Tech -23%... The Ultimate SWAN Portfolio <img src=\"https://static.tigerbbs.com/6cc28eeeb3fd642ac0aa284500b4617c\" tg-width=\"640\" tg-height=\"260\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Portfolio Visualizer PremiumThe portfolio I&#39;m highlighting today is up 2% in 2022, beating the market by 17% and the Nasdaq by 25%.<ul><li>This is the power of low volatility blue-chips and prudent risk-management</li></ul><h2>9 High-Yield Blue-Chips For The Ultimate Sleep Well At Night Portfolio</h2><img src=\"https://static.tigerbbs.com/830dee466fa7d063f45a3c0379b7eeb5\" tg-width=\"640\" tg-height=\"309\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>(Source: DK Zen Research Terminal)<ul><li>Verizon (VZ)</li><li><a href=\"https://laohu8.com/S/UGI\">UGI Corp</a> (UGI)</li><li>Altria (MO)</li><li><a href=\"https://laohu8.com/S/MMM\">3M</a> (MMM)</li><li>Merck (MRK)</li><li><a href=\"https://laohu8.com/S/IBM\">IBM</a> (IBM)</li><li>Enbridge (ENB)</li><li>$Royal Bank of Canada(RY-T)$ (RY)</li><li>Realty Income (O)</li></ul>I&#39;ve linked to articles covering these companies&#39; long-term investment thesis, growth potential, and risk profiles.But the reason for these nine blue-chips is simple.<ul><li>4.5% very safe yield</li><li>21.6% average annual volatility (vs. 23% aristocrats and 28% standalone companies)</li><li>Aristocrat level safety and quality</li><li>10.8% long-term return potential</li></ul><h2>World-Class Quality You Can Trust In All Economic And Market Conditions</h2><img src=\"https://static.tigerbbs.com/bd618885cc81dccd2ff7e33fc573bf15\" tg-width=\"640\" tg-height=\"302\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Sorted By Credit Rating (Source: DK Zen Research Terminal)For context, the average aristocrat has<ul><li>87% quality</li><li>89% safety score</li><li>84% dependability</li><li>67% LT risk-management percentile</li></ul>These high-yield, low volatility blue-chips average 86% Ultra SWAN quality, matching the aristocrats, and are BBB+ stable rated by S&amp;P (on average).What does that mean? That this is one of the safest 4.5% yielding portfolio on earth.<table><colgroup></colgroup><tbody><tr><td>Rating</td><td>Dividend Kings Safety Score (161 Point Safety Model)</td><td>Approximate Dividend Cut Risk (Average Recession)</td><td>Approximate Dividend Cut Risk In Pandemic Level Recession</td></tr><tr><td>1 - unsafe</td><td>0% to 20%</td><td>over 4%</td><td>16+%</td></tr><tr><td>2- below average</td><td>21% to 40%</td><td>over 2%</td><td>8% to 16%</td></tr><tr><td>3 - average</td><td>41% to 60%</td><td>2%</td><td>4% to 8%</td></tr><tr><td>4 - safe</td><td>61% to 80%</td><td>1%</td><td>2% to 4%</td></tr><tr><td>5- very safe</td><td>81% to 100%</td><td>0.5%</td><td>1% to 2%</td></tr><tr><td>High-Yield, Low Volatility Blue-Chips</td><td>88%</td><td>0.5%</td><td>1.60%</td></tr><tr><td>Risk Rating</td><td>Low-Risk (70th industry percentile risk-management consensus)</td><td>BBB+ Stable outlook credit rating 5% 30-year bankruptcy risk</td><td>20% OR LESS Max Risk Cap Recommendation Each (IBM and UGI 2.5%)</td></tr></tbody></table>In the historical average recession, the risk of these companies cutting their dividends is approximately 1 in 200.In a severe recession, such as the Great Recession or Pandemic, it&#39;s approximately 1 in 63.S&amp;P estimates the average bankruptcy risk at 4.2%, a BBB+ stable credit rating.And six rating agencies estimate these blue-chips are in the top 30% of their industries in terms of long-term risk-management.And for final confirmation of safety and quality let&#39;s consider their 30-year average dividend growth streak.<ul><li>Effectively an aristocrat portfolio</li><li>1.5x longer than the Ben Graham standard of excellence</li></ul><h2>Wonderful Companies At Wonderful Prices</h2><img src=\"https://static.tigerbbs.com/87605a934ed63c5e2974b94481d3a056\" tg-width=\"640\" tg-height=\"311\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Source: DK Zen Research TerminalThe S&amp;P 500 is about 5% historically overvalued trading at 18x forward earnings.These high-yield blue-chips trade at 12.6x earnings, and a 14% historical discount to fair value.Analysts expect them to deliver 14% returns in the next year alone, but 23% total returns would be justified by fundamentals.<h2>Long-Term Fundamentals That Could Make You Rich</h2><img src=\"https://static.tigerbbs.com/b78f0eb5c79513c5c571e2a4320d3036\" tg-width=\"640\" tg-height=\"312\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Source: DK Zen Research TerminalThis is effectively a BBB+ rated aristocrat that yields 4.5%, is growing 6.3% and analysts expect to deliver 10.8% annual returns.<table><colgroup></colgroup><tbody><tr><td>Investment Strategy</td><td>Yield</td><td>LT Consensus Growth</td><td>LT Consensus Total Return Potential</td><td>Long-Term Risk-Adjusted Expected Return</td><td>Long-Term Inflation And Risk-Adjusted Expected Returns</td><td>Years To Double Your Inflation &amp; Risk-Adjusted Wealth</td><td>10 Year Inflation And Risk-Adjusted Expected Return</td></tr><tr><td>High-Yield, Low Volatility Blue-Chips</td><td>4.5%</td><td>6.30%</td><td>10.8%</td><td>7.6%</td><td>5.0%</td><td>14.4</td><td>1.63</td></tr><tr><td>Adam&#39;s Planned Correction Buys</td><td>3.9%</td><td>18.8%</td><td>22.7%</td><td>15.9%</td><td>13.3%</td><td>5.4</td><td>3.50</td></tr><tr><td>10-Year US Treasury</td><td>3.1%</td><td>0.0%</td><td>3.1%</td><td>3.1%</td><td>0.5%</td><td>133.3</td><td>1.06</td></tr><tr><td>REITs</td><td>2.9%</td><td>6.5%</td><td>9.4%</td><td>6.6%</td><td>4.0%</td><td>17.9</td><td>1.48</td></tr><tr><td>High-Yield</td><td>2.8%</td><td>10.3%</td><td>13.1%</td><td>9.2%</td><td>6.6%</td><td>10.9</td><td>1.90</td></tr><tr><td>S&amp;P 500</td><td>1.5%</td><td>8.5%</td><td>10.0%</td><td>7.0%</td><td>4.5%</td><td>16.2</td><td>1.55</td></tr></tbody></table>(Source: Morningstar, FactSet, YCharts)What does this mean for you?<h4>Inflation-Adjusted Consensus Total Return Potential: $1,000 Initial Investment</h4><table><colgroup></colgroup><tbody><tr><td>Time Frame (Years)</td><td>7.4% CAGR Inflation-Adjusted S&amp;P Consensus</td><td>8.7% Inflation-Adjusted Aristocrat Consensus</td><td>8.3% CAGR Inflation-Adjusted High-Yield, Low Volatility Blue-Chip Consensus</td><td>Difference Between Inflation Adjusted High-Yield, Low Volatility Blue-Chip Consensus And S&amp;P Consensus</td></tr><tr><td>5</td><td>$1,432.29</td><td>$1,514.08</td><td>$1,486.41</td><td>$54.12</td></tr><tr><td>10</td><td>$2,051.47</td><td>$2,292.44</td><td>$2,209.42</td><td>$157.96</td></tr><tr><td>15</td><td>$2,938.30</td><td>$3,470.93</td><td>$3,284.12</td><td>$345.82</td></tr><tr><td>20</td><td>$4,208.51</td><td>$5,255.26</td><td>$4,881.55</td><td>$673.04</td></tr><tr><td>25</td><td>$6,027.82</td><td>$7,956.89</td><td>$7,256.01</td><td>$1,228.18</td></tr><tr><td>30</td><td>$8,633.61</td><td>$12,047.36</td><td>$10,785.42</td><td>$2,151.81</td></tr></tbody></table>(Source: DK Research Terminal, FactSet)Analysts think these blue-chips can deliver 11x inflation-adjusted returns over the next 30 years.<table><colgroup></colgroup><tbody><tr><td>Time Frame (Years)</td><td>Ratio Aristocrats/S&amp;P</td><td>Ratio Inflation-Adjusted High-Yield, Low Volatility Blue-Chip Consensus, And S&amp;P Consensus</td></tr><tr><td>5</td><td>1.06</td><td>1.04</td></tr><tr><td>10</td><td>1.12</td><td>1.08</td></tr><tr><td>15</td><td>1.18</td><td>1.12</td></tr><tr><td>20</td><td>1.25</td><td>1.16</td></tr><tr><td>25</td><td>1.32</td><td>1.20</td></tr><tr><td>30</td><td>1.40</td><td>1.25</td></tr></tbody></table>(Source: DK Research Terminal, FactSet)That&#39;s potentially 25% better returns than the market, with 3x the much safer yield on day one and a lot less volatility.<h2>Historical Returns Since 1996 (Annual Rebalancing)</h2><blockquote>&#34;The future doesn&#39;t repeat, but it often rhymes.&#34; - Mark Twain</blockquote>Past performance is no guarantee of future results, but studies show that blue-chips with relatively stable fundamentals over time offer predictable returns based on yield, growth, and valuation mean reversion.<img src=\"https://static.tigerbbs.com/65819e34d5e25e03f6e8073cac9429fb\" tg-width=\"640\" tg-height=\"638\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Bank of America So let&#39;s take a look at how these high-yield blue-chips have performed over the last 26 years when over 91% of total returns were the result of fundamentals, not luck.<img src=\"https://static.tigerbbs.com/abf063928bfbc73e00b68ef7db3c80a2\" tg-width=\"640\" tg-height=\"146\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Portfolio Visualizer Premium They almost doubled a 60/40 retirement portfolio and beat the S&amp;P 500 by 3% annually but with 2.6% lower annual volatility.Most impressively, during the 2nd biggest stock market crash in US history, they fell no more than a 60/40 portfolio.<ul><li>9 blue-chips falling less than a 40% bond portfolio</li></ul>And let&#39;s not forget about the main job of this portfolio, generous, safe, and steadily growing income.<table><colgroup></colgroup><tbody><tr><td>Portfolio</td><td>1996 Income Per $1,000 Investment</td><td>2021 Income Per $1,000 Investment</td><td>Annual Income Growth</td><td>Starting Yield</td><td>2021 Yield On Cost</td></tr><tr><td>High-Yield Low Volatility Blue-Chips</td><td>$53</td><td>$1,068</td><td>12.76%</td><td>5.3%</td><td>106.8%</td></tr><tr><td>S&amp;P 500</td><td>$22</td><td>$147</td><td>7.89%</td><td>2.2%</td><td>14.7%</td></tr></tbody></table>(Source: Portfolio Visualizer Premium)While the market grew its dividends at a decent 8% rate, these much higher-yielding low volatility blue-chips delivered 13% long-term income growth.<ul><li>5.3% yield in 1996 and 107% yield on cost in 2021</li></ul>What about future income growth?<table><colgroup></colgroup><tbody><tr><td>Analyst Consensus Income Growth Forecast</td><td>Risk-Adjusted Expected Income Growth</td><td>Risk And Tax-Adjusted Expected Income Growth</td><td>Risk, Inflation, And Tax Adjusted Income Growth Consensus</td></tr><tr><td>10.4%</td><td>7.3%</td><td>6.2%</td><td>3.6%</td></tr></tbody></table>(Source: DK Research Terminal, FactSet)Analysts expect 10.4% long-term income growth.When we adjust for the risk of these companies not growing as expected, inflation and taxes, we get a real expected income growth rate of 3.6%.Now compare that to what they expect from the S&amp;P 500.<table><tbody><tr><td>Time Frame</td><td>S&amp;P Inflation-Adjusted Dividend Growth</td><td>S&amp;P Inflation-Adjusted Earnings Growth</td></tr><tr><td>1871-2021</td><td>1.6%</td><td>2.1%</td></tr><tr><td>1945-2021</td><td>2.4%</td><td>3.5%</td></tr><tr><td>1981-2021 (Modern Falling Rate Era)</td><td>2.8%</td><td>3.8%</td></tr><tr><td>2008-2021 (Modern Low Rate Era)</td><td>3.5%</td><td>6.2%</td></tr><tr><td>FactSet Future Consensus</td><td>2.0%</td><td>5.2%</td></tr></tbody></table>(Sources: S&amp;P, FactSet, Multipl.com)What about a 60/40 retirement portfolio?<ul><li>0.5% consensus inflation, risk, and tax-adjusted income growth.</li></ul>In other words, these 6 blue-chip bargains offer:<ul><li>3x the market&#39;s yield (and a much safer yield at that)</li><li>nearly 2x its long-term inflation-adjusted consensus income growth potential</li><li>7x better long-term inflation-adjusted income growth than a 60/40 retirement portfolio</li></ul>This is the power of high-yield, low volatility blue-chip investing to change your financial future and your life.<h2>Bottom Line: These 9 High-Yield, Low Volatility Blue-Chips Could Be Just What You Need To Sleep Well At Night</h2>I know this correction/bear market might seem scary. That&#39;s especially true if you are new to the market, joining in the giddiness following the pandemic.<ul><li>The single fastest bull run in history</li><li>+100% in 12 months</li></ul>That wasn&#39;t normal, this correction? Totally normal.<ul><li>The market&#39;s average peak decline since 1980 is 15%</li><li>In any given year you need to be prepared for this kind of decline</li><li>It&#39;s the cost of owning the best performing asset class in history</li></ul>If you have no savings to put to work, then the best course of action is to sit tight and trust your portfolio&#39;s risk management, which you hopefully have remained disciplined with and followed with annual rebalancing.<blockquote>Volatility caused by money managers who speculate irrationality with huge sums will offer the true investor more chance to make intelligent investment moves. He can be hurt by such volatility only if he is forced, by either financial or psychological pressures, to sell at untoward times.&#34; - Warren Buffett</blockquote>Volatility is not a threat to any prudently diversified and risk-managed portfolio.In fact, anyone reinvesting dividends benefits immensely from these kinds of periodic and completely normal sell-offs.And that&#39;s where the power of high-yield, low volatility blue-chips like VZ, MRK, UGI, MO, MMM, IBM, ENB, O, and RY come in.<ul><li>Aristocrat safety and quality</li><li>30-year average dividend growth streak</li><li>BBB+ stable average credit rating</li><li>4.5% very safe yield (3x that of the S&amp;P 500)</li><li>6.3% long-term growth consensus</li><li>10.8% CAGR total return consensus potential (vs. 13% historical returns over the last 26 years)</li><li>Average annual volatility of 12.5% vs. 15% S&amp;P 500</li><li>Peak decline of 31% during the Great Recession (same as a 60/40 portfolio)</li><li>Up almost 3% YTD vs. -15% S&amp;P 500</li></ul>This is the power of trusting the world&#39;s best low volatility high-yield blue-chips when the market is at its most frightening.This is how you take charge of your financial destiny and stop praying for luck on Wall Street.This is how you can avoid costly mistakes, such as panic selling within 7% of what could be this bear market bottom.If you&#39;re exhausted from this correction, you&#39;re not alone.Just remember that 97% of long-term investing returns are a function of fundamentals, not luck.And the fundamentals of these nine high-yield, low volatility blue-chips are rock solid.And that&#39;s why they combine to form one of the best Ultra SWAN portfolios in the world, perfect for troubled times like these.</body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n9 High-Yield Blue-Chips To Help You Sleep Well At Night In This Bear Market\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-06 20:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4507751-9-high-yield-blue-chips-help-sleep-well-bear-market>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\ngradyreese/E+ via Getty ImagesThe wild stock market ride in 2022 continues.YChartsOn Wednesday, May 4th, after Fed Chairman Jerome Powell took 75 basis point hikes off the table, the market roared ...\n\n<a href=\"https://seekingalpha.com/article/4507751-9-high-yield-blue-chips-help-sleep-well-bear-market\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"161125":"标普500","513500":"标普500ETF","BK4515":"5G概念","IVV":"标普500指数ETF","ENB":"安桥","BK4516":"特朗普概念","SPXU":"三倍做空标普500ETF","SSO":"两倍做多标普500ETF","OEF":"标普100指数ETF-iShares","MMM":"3M","IBM":"IBM","BK4566":"资本集团","BK4575":"芯片概念","RY":"加拿大皇家银行","BK4504":"桥水持仓","BK4206":"工业集团企业","BK4559":"巴菲特持仓","BK4512":"苹果概念","OEX":"标普100","BK4579":"人工智能","BK4550":"红杉资本持仓","MRK":"默沙东","BK4197":"燃气公用事业",".SPX":"S&P 500 Index","BK4115":"综合电信业务","O":"Realty Income Corp","BK4207":"综合性银行","BK4134":"信息科技咨询与其它服务","SDS":"两倍做空标普500ETF","BK4538":"云计算","BK4581":"高盛持仓","MO":"奥驰亚","BK4080":"零售业房地产投资信托","SPY":"标普500ETF","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4007":"制药","BK4075":"烟草","UPRO":"三倍做多标普500ETF","VZ":"威瑞森","BK4534":"瑞士信贷持仓","UGI":"UGI公用事业","SH":"标普500反向ETF","BK4144":"石油与天然气的储存和运输"},"source_url":"https://seekingalpha.com/article/4507751-9-high-yield-blue-chips-help-sleep-well-bear-market","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2233539913","content_text":"gradyreese/E+ via Getty ImagesThe wild stock market ride in 2022 continues.YChartsOn Wednesday, May 4th, after Fed Chairman Jerome Powell took 75 basis point hikes off the table, the market roared higher with the Nasdaq soaring 3.5%.As I write this, the market is down 3.7% and the Nasdaq 5.1%.Bonds are getting crushed and even low volatility stocks are selling off, though just a fraction as much.Why is the market getting hammered today? There is no news to explain it, it's just soaring interest rates and crashing stock prices.I understand that a lot of investors are getting exhausted by this volatility.It seems historic and in a way it is.Charlie BilelloIn fact, it's the 3rd worst start of the year for stocks in history.But guess what?Daily Shot It's also a perfectly average correction, just one that's happening a bit quicker than usual.The temptation to sell everything and hide in cash (and under your bed) might be strong, but as I've explained in numerous articles, market timing is a great way to destroy your nest egg.If you try to time the market you'll churn your portfolio to death.\" - Joshua Brown, CEO Ritholtz Wealth ManagementThis article explains why this bear market is normal, healthy, and could end within the next month or so (about 6% lower on the S&P 500).But in the meantime, let me show you how to harness the power of the world's best low volatility, high-yield blue-chips to sleep well at night, while growing rich over time, in this and all future bear markets.Up 2% YTD While The Market Is Down 15% And Tech -23%... The Ultimate SWAN Portfolio Portfolio Visualizer PremiumThe portfolio I'm highlighting today is up 2% in 2022, beating the market by 17% and the Nasdaq by 25%.This is the power of low volatility blue-chips and prudent risk-management9 High-Yield Blue-Chips For The Ultimate Sleep Well At Night Portfolio(Source: DK Zen Research Terminal)Verizon (VZ)UGI Corp (UGI)Altria (MO)3M (MMM)Merck (MRK)IBM (IBM)Enbridge (ENB)$Royal Bank of Canada(RY-T)$ (RY)Realty Income (O)I've linked to articles covering these companies' long-term investment thesis, growth potential, and risk profiles.But the reason for these nine blue-chips is simple.4.5% very safe yield21.6% average annual volatility (vs. 23% aristocrats and 28% standalone companies)Aristocrat level safety and quality10.8% long-term return potentialWorld-Class Quality You Can Trust In All Economic And Market ConditionsSorted By Credit Rating (Source: DK Zen Research Terminal)For context, the average aristocrat has87% quality89% safety score84% dependability67% LT risk-management percentileThese high-yield, low volatility blue-chips average 86% Ultra SWAN quality, matching the aristocrats, and are BBB+ stable rated by S&P (on average).What does that mean? That this is one of the safest 4.5% yielding portfolio on earth.RatingDividend Kings Safety Score (161 Point Safety Model)Approximate Dividend Cut Risk (Average Recession)Approximate Dividend Cut Risk In Pandemic Level Recession1 - unsafe0% to 20%over 4%16+%2- below average21% to 40%over 2%8% to 16%3 - average41% to 60%2%4% to 8%4 - safe61% to 80%1%2% to 4%5- very safe81% to 100%0.5%1% to 2%High-Yield, Low Volatility Blue-Chips88%0.5%1.60%Risk RatingLow-Risk (70th industry percentile risk-management consensus)BBB+ Stable outlook credit rating 5% 30-year bankruptcy risk20% OR LESS Max Risk Cap Recommendation Each (IBM and UGI 2.5%)In the historical average recession, the risk of these companies cutting their dividends is approximately 1 in 200.In a severe recession, such as the Great Recession or Pandemic, it's approximately 1 in 63.S&P estimates the average bankruptcy risk at 4.2%, a BBB+ stable credit rating.And six rating agencies estimate these blue-chips are in the top 30% of their industries in terms of long-term risk-management.And for final confirmation of safety and quality let's consider their 30-year average dividend growth streak.Effectively an aristocrat portfolio1.5x longer than the Ben Graham standard of excellenceWonderful Companies At Wonderful PricesSource: DK Zen Research TerminalThe S&P 500 is about 5% historically overvalued trading at 18x forward earnings.These high-yield blue-chips trade at 12.6x earnings, and a 14% historical discount to fair value.Analysts expect them to deliver 14% returns in the next year alone, but 23% total returns would be justified by fundamentals.Long-Term Fundamentals That Could Make You RichSource: DK Zen Research TerminalThis is effectively a BBB+ rated aristocrat that yields 4.5%, is growing 6.3% and analysts expect to deliver 10.8% annual returns.Investment StrategyYieldLT Consensus GrowthLT Consensus Total Return PotentialLong-Term Risk-Adjusted Expected ReturnLong-Term Inflation And Risk-Adjusted Expected ReturnsYears To Double Your Inflation & Risk-Adjusted Wealth10 Year Inflation And Risk-Adjusted Expected ReturnHigh-Yield, Low Volatility Blue-Chips4.5%6.30%10.8%7.6%5.0%14.41.63Adam's Planned Correction Buys3.9%18.8%22.7%15.9%13.3%5.43.5010-Year US Treasury3.1%0.0%3.1%3.1%0.5%133.31.06REITs2.9%6.5%9.4%6.6%4.0%17.91.48High-Yield2.8%10.3%13.1%9.2%6.6%10.91.90S&P 5001.5%8.5%10.0%7.0%4.5%16.21.55(Source: Morningstar, FactSet, YCharts)What does this mean for you?Inflation-Adjusted Consensus Total Return Potential: $1,000 Initial InvestmentTime Frame (Years)7.4% CAGR Inflation-Adjusted S&P Consensus8.7% Inflation-Adjusted Aristocrat Consensus8.3% CAGR Inflation-Adjusted High-Yield, Low Volatility Blue-Chip ConsensusDifference Between Inflation Adjusted High-Yield, Low Volatility Blue-Chip Consensus And S&P Consensus5$1,432.29$1,514.08$1,486.41$54.1210$2,051.47$2,292.44$2,209.42$157.9615$2,938.30$3,470.93$3,284.12$345.8220$4,208.51$5,255.26$4,881.55$673.0425$6,027.82$7,956.89$7,256.01$1,228.1830$8,633.61$12,047.36$10,785.42$2,151.81(Source: DK Research Terminal, FactSet)Analysts think these blue-chips can deliver 11x inflation-adjusted returns over the next 30 years.Time Frame (Years)Ratio Aristocrats/S&PRatio Inflation-Adjusted High-Yield, Low Volatility Blue-Chip Consensus, And S&P Consensus51.061.04101.121.08151.181.12201.251.16251.321.20301.401.25(Source: DK Research Terminal, FactSet)That's potentially 25% better returns than the market, with 3x the much safer yield on day one and a lot less volatility.Historical Returns Since 1996 (Annual Rebalancing)\"The future doesn't repeat, but it often rhymes.\" - Mark TwainPast performance is no guarantee of future results, but studies show that blue-chips with relatively stable fundamentals over time offer predictable returns based on yield, growth, and valuation mean reversion.Bank of America So let's take a look at how these high-yield blue-chips have performed over the last 26 years when over 91% of total returns were the result of fundamentals, not luck.Portfolio Visualizer Premium They almost doubled a 60/40 retirement portfolio and beat the S&P 500 by 3% annually but with 2.6% lower annual volatility.Most impressively, during the 2nd biggest stock market crash in US history, they fell no more than a 60/40 portfolio.9 blue-chips falling less than a 40% bond portfolioAnd let's not forget about the main job of this portfolio, generous, safe, and steadily growing income.Portfolio1996 Income Per $1,000 Investment2021 Income Per $1,000 InvestmentAnnual Income GrowthStarting Yield2021 Yield On CostHigh-Yield Low Volatility Blue-Chips$53$1,06812.76%5.3%106.8%S&P 500$22$1477.89%2.2%14.7%(Source: Portfolio Visualizer Premium)While the market grew its dividends at a decent 8% rate, these much higher-yielding low volatility blue-chips delivered 13% long-term income growth.5.3% yield in 1996 and 107% yield on cost in 2021What about future income growth?Analyst Consensus Income Growth ForecastRisk-Adjusted Expected Income GrowthRisk And Tax-Adjusted Expected Income GrowthRisk, Inflation, And Tax Adjusted Income Growth Consensus10.4%7.3%6.2%3.6%(Source: DK Research Terminal, FactSet)Analysts expect 10.4% long-term income growth.When we adjust for the risk of these companies not growing as expected, inflation and taxes, we get a real expected income growth rate of 3.6%.Now compare that to what they expect from the S&P 500.Time FrameS&P Inflation-Adjusted Dividend GrowthS&P Inflation-Adjusted Earnings Growth1871-20211.6%2.1%1945-20212.4%3.5%1981-2021 (Modern Falling Rate Era)2.8%3.8%2008-2021 (Modern Low Rate Era)3.5%6.2%FactSet Future Consensus2.0%5.2%(Sources: S&P, FactSet, Multipl.com)What about a 60/40 retirement portfolio?0.5% consensus inflation, risk, and tax-adjusted income growth.In other words, these 6 blue-chip bargains offer:3x the market's yield (and a much safer yield at that)nearly 2x its long-term inflation-adjusted consensus income growth potential7x better long-term inflation-adjusted income growth than a 60/40 retirement portfolioThis is the power of high-yield, low volatility blue-chip investing to change your financial future and your life.Bottom Line: These 9 High-Yield, Low Volatility Blue-Chips Could Be Just What You Need To Sleep Well At NightI know this correction/bear market might seem scary. That's especially true if you are new to the market, joining in the giddiness following the pandemic.The single fastest bull run in history+100% in 12 monthsThat wasn't normal, this correction? Totally normal.The market's average peak decline since 1980 is 15%In any given year you need to be prepared for this kind of declineIt's the cost of owning the best performing asset class in historyIf you have no savings to put to work, then the best course of action is to sit tight and trust your portfolio's risk management, which you hopefully have remained disciplined with and followed with annual rebalancing.Volatility caused by money managers who speculate irrationality with huge sums will offer the true investor more chance to make intelligent investment moves. He can be hurt by such volatility only if he is forced, by either financial or psychological pressures, to sell at untoward times.\" - Warren BuffettVolatility is not a threat to any prudently diversified and risk-managed portfolio.In fact, anyone reinvesting dividends benefits immensely from these kinds of periodic and completely normal sell-offs.And that's where the power of high-yield, low volatility blue-chips like VZ, MRK, UGI, MO, MMM, IBM, ENB, O, and RY come in.Aristocrat safety and quality30-year average dividend growth streakBBB+ stable average credit rating4.5% very safe yield (3x that of the S&P 500)6.3% long-term growth consensus10.8% CAGR total return consensus potential (vs. 13% historical returns over the last 26 years)Average annual volatility of 12.5% vs. 15% S&P 500Peak decline of 31% during the Great Recession (same as a 60/40 portfolio)Up almost 3% YTD vs. -15% S&P 500This is the power of trusting the world's best low volatility high-yield blue-chips when the market is at its most frightening.This is how you take charge of your financial destiny and stop praying for luck on Wall Street.This is how you can avoid costly mistakes, such as panic selling within 7% of what could be this bear market bottom.If you're exhausted from this correction, you're not alone.Just remember that 97% of long-term investing returns are a function of fundamentals, not luck.And the fundamentals of these nine high-yield, low volatility blue-chips are rock solid.And that's why they combine to form one of the best Ultra SWAN portfolios in the world, perfect for troubled times like these.","news_type":1},"isVote":1,"tweetType":1,"viewCount":596,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":11,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}