By: Dividend Sensei
Vaccine/Stimulus/Economic Boom euphoria has sent the S&P 500 soaring to 36% historically overvalued levels. The market is now pricing in three years of growth and medium-term return potential is pathetic.
Deutsche Bank just warned of a likely 6% to 10% market decline within the next three months.
Their reasoning is sound and high market valuations increase the risk of such a historically average pullback.
Low volatility blue-chips can be a great way to reduce overall portfolio volatility and let you sleep well at night, remaining calm, rational, and disciplined.
These companies are the four lowest volatility blue-chips trading at reasonable valuations right now.
Combined they yield a very safe 3.0%, are 2% undervalued, and analysts expect them to deliver 8.3% annual long-term total returns, slightly above the highly overvalued market.
While no dividend stock is a bond alternative, these four names represent reasonable and prudent low volatility dividend blue-chips that JPMorgan Asset Management estimates will fall approximately 50% less during the next market downturn, about 4.8% rather than 8%.