Stay the Course


Is the seven-year bull market finally over? It’s certainly possible that one of the longest bull markets in history might be coming to an abrupt end. In the past, though, bull markets don’t usually end so abruptly—they roll over slowly.

Slowing growth in China and oil’s precipitous decline are cause for concern, but bailing out of the market is probably a bad idea. Staying the course is the better option because you don’t want to be out of your best holdings when the stock market turns higher.

I do suggest selling your over-valued growth stocks with high price-to-earnings ratios because these stocks have led the stock market higher during the past several years and are now vulnerable to further erosion.

But I recommend holding your high-quality undervalued stocks. Value stocks have lagged the market by a wide margin during the past seven years, and are likely to decrease less than the market while the market is choppy, and rise faster than the market when the stocks rebound.

A majority of the stocks and ETFs in your portfolio should have “very low” or “low” Risk Ratings coupled with Value Ratings above 3.00. These conservative stocks will help you survive the current carnage. The 16 buy recommendations in the Cabot Enterprise Model provide a wide array of attractive choices. Buy cautiously and hold patiently.

This is an excerpt from Cabot Benjamin Graham Value Investor, which features the very best undervalued stocks to buy right now. Chief Analyst J. Royden Ward tells you exactly which undervalued stocks to buy and when to take profits. This advisory is ideal for conservative investors.

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Shopify (SHOP), which came public in May of last year, is a new leader.


Roy Ward uses the PEG ratio to determine if the stock is undervalued or overvalued.

For AMZN to be undervalued, the stock would need to fall to 393. 50.

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