3 Reasons Investors Should Ignore the Doomsayers

The global and U.S. economies aren't as feeble as many of the scarier headlines proclaim.

A reader named Bill just e-mailed me to ask if he should dump some holdings. “I’m worried about all the things going on in the Middle East, Russia and Israel,” he wrote. Beyond his general concern, he specifically asked whether he should retain his positions in Occidental Petroleum (symbol OXY) and Dodge & Cox Income (DODIX).

In truth, Bill, if I could choose two ideas that would benefit from global turmoil, I might pick this tandem. Oxy is a huge producer of energy in California, North Dakota and Texas. Its minor Middle East operations are mainly in relatively quiet Qatar and Oman. Oxy is also a primo dividend raiser. Dodge & Cox Income is a superb intermediate-maturity bond fund. It holds mostly Treasuries and investment-grade U.S. corporate bonds that are likely to benefit from America’s safe-haven status and strong demand for high-quality bonds of all sorts.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.