When the market starts to appear greedy, I tend to get a little uneasy, and that’s where we need to consider taking profits here and there, possibly moving some of those “winnings” into a high-yielding, solid performer. Now Wells Fargo & Company (NYSE:WFC), isn’t exactly distinguished as one of my stock “crushes” this year, it received numerous mentions from yours truly last year, and performed accordingly, gaining 20% in 2012. Even after a recent, decent earnings call, the stock remains flat so far, year-to-date, which is simply sublime. As the housing market continues along the road to recovery, with Wells owning over 30% of the mortgage business in this great country, clearly there’s nowhere to go but up, even if it is slow and steady. And as a loyal investor in the company, you not only share that distinction with arguably one of the greatest buy-and-hold investors, Warren Buffett, but your dedication is rewarded by way of a 2.8% dividend yield, paying a crisp dollar bill annually for each share owned.
I realize there isn’t anything remotely sexy and exciting about Wells Fargo, but as this “rally” continues, with more positive news coming from the housing sector, and if financials lead the way, there are definitely worse places to protect profits for potential market volatility. And if things get a little bumpy along the way, reinvested dividends at lower share prices make for a more favorable cost basis and higher percentage gains after moody market corrections.
The article This Market Has Sinewy Legs originally appeared on Fool.com and is written by Kyle Metivier.
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