(This was originally published in the September 2017 version of The Dividend Growth Newsletter. It is available here.)
It’s always an interesting exercise to see how human psychology can dominate the stock market. Fall is upon us, and believers of the “October Effect” must also sense that in the markets, too. The crashes of 1907, 1929 and 1987 all occurred during that wretched month, and last October the S&P 500 declined 1.94%.
To make things worse, Donald “Dotard” Trump and Kim “Rocket Man” Jong-un continue to have their war of words, with no resolution in sight. The hope is that both administrations will limit their aggression to playground insults and not launching nuclear warheads. The lack of a response by markets to this constant friction is both surprising, in the sense that markets can be sensitive to political developments, and also unsurprising, in the sense that markets are so quick to react and analyze situations that most don’t expect a nuclear war to occur. But, uncertainty continues to be an enemy of the markets, and constant vigilance required.
A new addition to the American Dividend Aristocrat Portfolio is Carnival Corp. (NYSE:CCL), which operates the Carnival Cruise, Holland America and Princess Cruise Lines. The stock currently has a dividend yield of 2.48% and prior to the string of hurricanes, posted a record profits in their most recent quarter.