It might be tough some for to admit it, but nobody knows when the stock market is going to crash.
Sure, commentators and economists will speculate, but there's a saying in finance, "Economists have correctly picked nine of the last two recessions." Sooner or later, they'll get it right.
Just take this week's Reserve Bank of Australia decision to keep interest rates on hold. Of the 29 analysts surveyed by Bloomberg 18 said rates would be cut. They were wrong.
So instead of wasting time speculating over market movements, investors should focus on picking great businesses that will be profitable in any market and buy the shares at a good price.
It might not be pretty but it's a simple strategy which could save your hairline and help you beat the market over the long term.
For example Credit Corp Group Limited (ASX: CCP) might be just a boring finance and debt collections company, but it's got a steady track record of earnings and dividends per share growth over many years. At today's prices, its valuation does not appear demanding and it boasts a forecast dividend yield of 3.45%, fully franked.
For long-term dividends and earnings growth, it's hard to go past share registry business, Computershare Limited (ASX: CPU). This morning, it announced a small acquisition which will complement its Canadian operations moving forward. With an experienced management team, acquisitive growth potential and sticky revenues, its current valuation does not appear excessive.
Finally, right now could be a great time to buy shares of Coca-Cola Amatil Ltd (ASX: CCL). Australia's distributor of Coca-Cola branded products suffered through a number of years of tough trading conditions where its share price fell heavily. At around $10.30 however, it looks to be good value. Its 3.8% partially franked dividend should keep investors enthusiastic while we wait for the cost cutting and revenue growth to hits it bottom line (profit) over coming years.
