We have been waiting for gold to breakout above the 2008 high for almost 2 years. These charts show we are slowly working our way there.


Gold Stocks Index – The Leading Indicator for Gold Bullion

The Fed is going to keep interest rates near zero for the foreseeable future. With 10-Year Treasury yields around 3.5%, solid blue chip companies offering decent dividends become popular. Not only do they offer current income and the possibility of capital gains, they also have better protection against inflation than regular bonds. No wonder Warren Buffett wrote, “Buy American. I Am.” in The New York Times last October.  

However, the economy is still in the bottoming process. There is a potential risk for the economic to backslide. Which blue chips are relatively safe?

I use following 9 criteria to select relatively safe dividend stocks:

1.Yield>=3.5%
As an alternative to 10-Year Treasury, stocks need to have at least that kind of yield.

2. Market Cap >$2 billion
Generally speaking, the bigger, the safer. 

3. P/E and Forward P/E both <=20