I have often mentioned the late John Templeton, a fund manager held in great esteem. The market's action the past three weeks brings to mind two of his keen observations. "Stock prices are a lot more volatile than stock values." No question (see below). Then there was this: "The best buying opportunity is at the moment of maximum pessimism." I have seen the truth of that many times, most recently on March 23 when investors capitulated and the media piled on. 

Through Wednesday the S&P 500 is 25 percent above its March 23 low and down 17 percent from its mid-February all-time high. The Nasdaq Composite is only down 5 percent for the year. Yes, some days it sure felt worse than it was because the speed of the decline was alarming. The speed of the rally has not been alarming at all. Bring it on.

My article titled “Bargain Hunting” focused on healthcare stocks, which are serving us well. Biotechnology and pharmaceutical companies are in a full-court press to find treatments and a vaccine. My only concern is that most other research has slowed because the buildings are virtually empty. One can do just so much from home. As that article stated, among my favorites are Becton Dickinson (BDX), Amgen (AMGN), Merck (MRK), and Pfizer (PFE). All are strong dividend payers.  

Speaking of dividends, material from Charles Schwab for the years 1980 to 2019 supports the importance of dividends and especially dividend growth. Stocks that raised or initiated dividends had total returns of 13.8 percent annually. Stocks with no change in dividends returned 11.1 percent and those that cut or eliminated payouts returned 8.7 percent. Those that did not pay dividends returned only 7.9 percent annually. Look at the annual advantage dividend raisers have over the others.

Soon enough the economy will begin to open up in phases in some but not all areas. People will venture out to shop, even eat in half-full restaurants. My best guess is that the economy will bottom midway through the second quarter and rebound as production ramps up and people begin to feel more comfortable. Investors are anticipating that. Testing often will be part of the new normal, too. The economic rebound will not equal the pace at which it fell, but it needn't. As long as we're on the track to increasingly faster growth investors will be well ahead of the data. They already are, which is why stocks have rallied.