This misperception first appeared in the polls in 2009 following the outbreak of the financial crisis. It thus reflects the damage done not only to employment but also to real estate and stock prices. Stocks have recovered, real estate has not, and this persisting error reflects the continuing damage to investor confidence.

Such irrational reactions may account for the substantial withdrawals that investors made from stock mutual fund during the first quarter of this year despite the stock market having its best quarter since 2009. Damon Runyon said, “The race is not always to the swift nor the battle to the strong, but that’s the way to bet.” Reacting to market fluctuations and news events is not the way to bet.

Uncertainties today over the political drama, fiscal gaps and the unsettled situation in Europe may prompt memories of 2011, when the market went nowhere. These issues are certainly material but they are quite well publicized and already baked into today’s market levels. (If they didn’t exist, the Dow would probably be over 20,000 already.)

Last year, the market confronted both the potential for the government to default on its debt and the unknown implications of a downgrade of the Treasury’s AAA debt rating. One happened, the other didn’t and the downgrade to AA+ had no impact on the Treasury’s ability to borrow. Normally, a debt downgrade raises the interest costs of a borrower but widespread fears provoked a continuing wave of buying of U.S. government bonds, lowering its interest rates. Reality again differed from public perception.

Euro Zone financial issues remain unsolved but last year saw commitments by its sounder members to attempt cooperative resolution rather than abandon the weaker members. In this country, although the recovery is still weak, it is continuing and the U.S. economy is on stronger footings. Employment, manufacturing, auto sales, payrolls and even housing starts all show improvement. As the year continues, investors will become less frightened that we face another financial crisis although each new headline will probably produce sporadic fearful selling.

Interest rates continue to drop with the key 10-year Treasury down to 1.96%. Its rate was usually around 5% a few years ago and its all time low was 1.95% in December 1941. At some point, probably in a few months, the economic recovery will gain more traction with an accompanying rise in interest rates. Higher rates will mean lower bond prices and bonds, particularly long-term bonds, should be sold, and not bought.

Quality stocks tempered by the stresses of the last few years with rising sales and earnings should be bought. Thermo Fisher (TMO-$55) is a global provided of scientific equipment and services. Sales are over $12 billion and growing despite its academic and government customers deferring capital expenditures. Thermo’s first-quarter results exceeded expectations and it raised its earnings guidance for 2012 to $4.75 and Wall Street analysts forecast $5.30 next year.

That’s a reasonable valuation and there’s even a modest dividend. For those looking for income, a reader inquired about Windstream (WIN-$11) an Arkansas-based provider of Internet, phone and TV services to rural areas. Sales are substantial ($4 billion) but earnings have been irregular. Its main attraction is its .25 a share quarterly dividend, which it has paid since 2007 and is almost a 9% yield. Windstream has a lot of debt but low interest rates make that burden easier and I think it’s attractive enough to justify taking small positions.

Two major factors are changing the stock marketplace today. One is the aftermath of the financial crisis that left many investors with a nervous attitude of “Show me the money.” The second is the continuing record low levels of interest rates on bonds and similar more plodding investments.

The yield on 5-year U.S. Treasury bonds is currently less than 1%. In contrast, IBM (IBM-$206), which just increased its dividend for the sixteenth straight year, yields 1.5%. Trying to look five years ahead, always a good exercise, I cannot imagine any realistic circumstances that would provide a greater return on the bond. Anyone obsessed by the greater certainty of the bond would probably be better off investing in both IBM and some sessions of personal psychotherapy.

Exxon Mobil (XOM-$86) increased its dividend for the twenty-ninth straight year and now yields 2.6%, almost as much as a 30-year Treasury bond. Its new total annual dividend payments of $10.7 billion make it the world dividend leader. AT&T is second. Surprisingly, next with $9.9 billion is a new contender, Apple (AAPL-$607). Its new dividend of $2.65 quarterly initiates a 1.7% yield.

Apple is an increasingly respected company and its example may inspire others like Amazon or Google to consider initiating dividends. I would certainly not rule out non-dividend payers (which would have ruled out Apple) but favor growing companies that show their regard for their shareholders by including them in the growth with payouts.

Intel (INTC-$28) is exemplary with a 3% yield and eight years of increases. Staying in this increasingly popular tech sector, Qualcomm (QCOM-$64) and Broadcom (BRCM-$36) offer yields over 1%. They are both major suppliers for Apple’s newest products.

Digital Realty Trust (DLT-$74) owns and operates over 100 data centers in 31 countries. Its recent quarterly report showed steady growth; it also increased its dividend. The yield is now 4% and it has bumped the dividend for the last six years.

The financial sector used to be a leader in dividend payments but it lost that position abruptly during the financial crisis. Citigroup is a particular embarrassment. It paid its first dividend in 1813 but has been able to keep that 200-year streak alive only by cutting the current dividend to a penny every quarter.

Aflac (AFL-$45), which sells supplemental health insurance in the U.S. and Japan, popped three points on its quarterly report, which trumped Wall Street forecasts. This is an excellent stock for retirement accounts with a 3% yield and dividend increases for twenty-nine years. Earnings growth is steady but not flashy and it is selling for only seven times earnings.

ACE Limited (ACE-$76), a global Zurich-based insurer and reinsurer is my newest addition. Like Aflac, its stock is reasonably valued and its current 2.2% yield has sound prospects for increases. Its CEO is Evan Greenberg, who worked 25 years at AIG for his father, the notorious “Hank” Greenberg. (“Hank” is believed to have modeled his management style after General Patton.)

Evan’s older brother, Jeffrey Greenberg, also worked for their father at AIG before resigning and joining Marsh & McLennan, the large insurance broker. “Hank” was forced to resign from AIG during the financial crisis and Jeffrey from Marsh & McLennan, each after allegations of various financial improprieties by then New York Attorney General Eliot Spitzer. Later, Mr. Spitzer also resigned (after being elected Governor) following admissions of diverse personal improprieties. Only Evan survived this turbulent period and the company he heads is doing well.

That’s several months away and the intervening clamoring from financial barkers is likely to breed anxieties among investors that they should be doing something. These agitations spawn much broker talk about the presumed need for rebalancing portfolios or for adjusting diversification.

There’s nothing wrong with these concepts although I suspect they sometimes produce more fees for brokers than gains for investors. It is fairly easy to compute the proportions of stock portfolios in various sectors but more difficult and more rewarding to select and augment positions in companies with superior performance.

This mean that stock price gains and new buys may result in overweighted positions among stock portfolios such as our increasing proportions of pharmaceutical stocks. This echoes Mae West’s advice, “Too much of a good thing is wonderful.”

My recommendations often include stocks from companies based outside the U.S. such as Denmark’s Novo-Nordisk (NVO-$150) and Swiss-based Syngenta (SYT-$69). I continue to believe that unsettled world economies encourage investment in larger companies that have the resources both to withstand setbacks and to expand into new markets.

Newly advancing economies such as the “BRIC” countries present great opportunities but a global recovery still in its early stages will probably favor larger companies in more developed countries. BRIC is an acronym for Brazil, Russia, India and China. A Goldman Sachs economist developed it in 2001 and I feel almost anything originating from Goldman Sachs should come with a warning label.

The argument is that the combined economies of these four countries will develop more rapidly and will eclipse the combined economies of the richest nations by 2050. Interest developed among these countries into some sort of alliance and, with the addition of South Africa, they formed a political organization.

Its first meeting took place in 2009 in Yekaterinburg, previously noted as the site of the shooting of the Romanov family in 1918. The financial crisis interrupted BRIC expansion and stocks from these countries will probably not return to favor until further healing of the wounds of this crisis. As this happens, stocks should be considered from other developing economies like Turkey, Mexico, Indonesia and South Korea.

Canada shares the relatively strong financial position of the U.S. Often associated with stocks of mining companies, whose results are usually erratic, its Brookfield Group presents an attractive variety of very well financed opportunities. Based in Toronto, it originally provided utility services in Brazil as “Brascan,” a combination of Brasil and Canada. It now owns and operates over $150 billion in assets, focused on real estate, renewable energy and infrastructure.

Brookfield Asset Management (BAM-$32) is the parent. About half of its assets are in high quality real estate such as the World Financial Center in Manhattan. A publicly traded subsidiary, Brookfield Properties (BPO-$17) is a REIT currently yielding 3.2%, with probable distribution increases in the near future. Brookfield Infrastructure Partners (BIP-$30) yields 4.5% and its holders have enjoyed increased distributions for three straight years.

Developing economies provide great investment potential. The better opportunities now lie in companies that already have the capital resources to successfully expand sales into these emerging areas. That brings up Apple (AAPL-$588). Its products are in great demand everywhere yet it is selling for only 13 times this year’s estimated earnings, less than the 16 times of the Nasdaq Index.

In stock investing, it is a truth universally acknowledged that returns on small cap stocks exceed those on bigger companies. After all, the risks inherent in buying something like a Chinese Internet company rather than IBM would logically seem to demand potentially higher returns. Studies of long-term investment returns support this logic although closer studies suggest that it may largely be due to spurts of small cap outperformance during periods of strong investor confidence.

The market is currently making nice progress despite continuing investor skepticism. Indeed, the time to take profits will be when market gains bring the jubilee of exuberant overconfidence. Today’s exacting economic conditions favor the stronger companies that have capital to invest in productivity and to expand their global reach into promising markets.

As a result of these factors, the combined sales, profits and employment of the 500 larger companies that make up the S&P500 Index now exceed their totals in 2007, before the financial crisis and recession. There is still a place for smaller companies like American Vanguard (AVD-$25) but modern markets favor big caps.

Apple (AAPL-$622), once a small cap, has achieved the biggest capitalization of any private company. Now a dividend paying stock, it belongs in almost any portfolio. Its next quarterly earnings report comes on April 24 and the company usually exceeds analyst forecasts.

I am adding Yum!Brands (YUM-$70), which operates over 37,000 restaurants under the KFC, Pizza Hut and Taco Bell brands. Its KFC restaurants are clear winners in China over slower growing McDonald’s. It also operates 450 casual dining concept restaurants in China. Sales are over $12 billion, growing at 15% with earnings growing even faster. Yield is 1.6% with increases for seven years.

The larger pharmaceutical stocks are strengthening and are still quite reasonably valued overall. Current buys are Novo-Nordisk (NVO-$145), Merck (MRK-$38), Bristol-Myers (BMY-$32) and Novartis (NVS-$55). Abbott Labs (ABT-$59), which is dividing its main medical supply lines from its drug division, also remains a buy. This sector lagged amid continuing political quarreling over how to pay for its products but their necessity insures continuing growth, particularly for the more soundly capitalized large companies.

Increasing global demand also provides a strong foundation for energy companies. Problems on the supply end in the Middle East are adding uncertainty to oil prices and I am concentrating new buys in ConocoPhillips (COP-$74), which is splitting its upstream exploration and production from its downstream marketing operations. Norway’s Statoil (STO-$25) is a possible repeat recommendation.

Broadcom (BRCM-$37) with $7 billion sales has less than half the sales of Qualcomm (QCOM-$68) but is more reasonably valued. I am adding Broadcom as a new buy, noting its participation in several Apple products. Qualcomm is also well placed and I expect good years for both companies.

Nokia (NOK-$4), despite over $50 billion sales, was knocked down to its book value on problems with its new Lumia phone. This is an unusual speculative turnaround recommendation but the company’s size provides a reasonable basis for recovery. There is even a $.26 dividend expected next month.

By then, we will be through the current earnings season and stocks should be settling down. That is never a guarantee, however, larger stocks will add stability and, in all probability, continuing gains.

The major positive factors are the continuing economic recovery, low interest rates with accompanying low inflation and reasonable valuations on most stocks. These low valuations stem from prevailing investor skepticism and lingering anxieties from the nerve racking financial collapse only a few years ago.

Objective vigilance is essential. This differs from subjective reactions to market fluctuations. Many investors react emotionally after events rather than using more coolheaded (and more difficult) efforts to analyze developing trends. This is probably why most mutual funds fail to keep up with the market as they must deal with their investors, who habitually sell near or after market bottoms while adding new capital whenever stocks climb into thin air.

Last year, when stocks went nowhere, both bonds and gold had very good years. I suspect they will become wistful memories for their clinging loyalists. The eventual return of higher interest rates will devastate long-term bonds while emotional attachments to gold will wane as the economic recovery rebuilds investor confidence.

Warren Buffett, usually introduced as the (deservedly) fabled “legendary investor,” said that bonds should come with a warning label. He also has said that gold trades on fear but doesn’t produce anything. Those who think gold will go up in price are really betting that people will be more afraid in a year or two.

Following in his wake sets a better course than changing tacks with every wind shift. US Bancorp (USB-$31) is one of his top ten holdings and I am continuing to add to our positions. Regional banks like USB dodged much of the damage suffered by money center banks when the housing bubble burst. There is no real help in sight yet for home prices but solidly capitalized and well-run larger banks are again pulling ahead.

Some of these banks like Citigroup are neither well-capitalized nor well run but the fittest are evolving ahead of their competitors. Wells Fargo (WFC-$33) looks like their leader and Mr. Buffett recently increased his positions. Its earnings are up and it joined US Bancorp in raising its dividend after both passed the Fed’s recent stress test. (Citigroup flunked.)

Mr. Buffett also increased his stakes in Intel (INTC-$28) and IBM (IBM-$205), two of our larger technology stocks. My favorite remains Apple (AAPL-$630), still a buy for those lacking this superb investment. Mr. Buffett has not reported buying Apple, thus we differ on this stock. I have read that he began using a computer relatively recently so that he could play bridge online with Microsoft’s Bill Gates. If so, I’m sure that Mr. Gates insured that Mr. Buffett was not exposed to influences outside Microsoft’s Windows system.

That company’s “Mobile Windows” is supporting my speculative recommendation of Nokia (NOK-$5). This former cell phone leader stumbled badly when its operating system was rendered obsolete by new smartphones. On April 8, it rolls out with AT&T its new “Lumina” phone with a Windows operating system and a $99 price. Nokia stock is not headed for its $70 price ten years ago but I think this is an attractive speculation on a new product with solid partners. Finland-based Nokia is in no danger of failure with over $50 billion in sales and a global presence in other businesses. After all, of 100 cell phones sold worldwide, 27 are Nokia.

Those surveyed considered stocks ranked third as an investment after real estate and gold; only 7% believe that this is a good time for investing in stocks. Those who began investing only in the last few years might well feel that way because their personal experiences left them feeling abused by the challenging stock market of the last ten years.

This is an understandable solipsism but disregards the superior long-range investment returns of stocks. Over the last 200 years, stocks returned an average of 6.5-7% annually, easily eclipsing real estate, gold and bonds. Over the last 10 years, stocks managed only a meager 1% annual return but the last 20 produced a 9% annual return, closer to their longer-range average.

These historical returns are certainly not forecasts of the market’s performance over the next year. They should help investors realize that the stock rally in the past few months is not an excuse to grasp short-term profits but, in all probability, signals a strengthening bull market, sending the market closer to its long-term returns.

There are certainly risks and always will be. The present dual problems of higher oil prices and lower home prices threaten the U.S. economic recovery. Europe has patched, but not fixed, the leaky pipes of its Euro Zone’s weaker members; their problems will continue to shadow ours.

Europe’s stalled recovery and irregular economic results in China make U.S. stocks comparatively attractive. Their appeal is enhanced by their moderate valuations and the business background here of very low interest rates and restrained inflation.

The financial sector continues to suffer from the hangover of its bubble years but well-run regional banks are gaining market share. I am continuing to add to our positions in U.S. Bancorp (USB-$31), which is growing earnings at double-digit rates, yet still trading at only 11 times estimated earnings. It recently increased its dividend by 56%. The yield is now 2.5% and this expanding bank has increased its dividend for 40 straight years.

Intel (INTC-$28), a leader in the elite technology sector, also trades at 11 times earnings despite double-digit growth and a 3% yield. With $54 billion sales and a widespread presence in all aspects of computing technology, it makes an easy target for lazy attention-seeking financial commentators, just as Apple attracts these same Lilliputian critics. Both companies are great creators. Disraeli commented, “It is much easier to be critical than to be correct.”

U.S. Bancorp, Intel and, of course, Apple are solid supports for successful investing. IBM (IBM-$208) is another member of this club. Their recent upward price moves celebrate their achievements and confirm their inclusion in almost any stock portfolio in current markets.

Last year’s stock market was both volatile and trendless. The resulting investor uncertainties favored bonds, gold and consumer stocks like McDonalds. None of these is well suited for a market in an uptrend. With the economic growth rate continuing to inch upward, cyclical stocks will do well.

My cyclical recommendations include Chicago Bridge and Iron (CBI-$43), Cummins (CMI-$119), DuPont (DD-$52), Deere (DE-$80) and Sigma-Aldrich (SIAL-$73). The market’s uptrend has invited some customary selling pressure and new buys should be made, if possible, on market dips. That tactic also applies to Apple (AAPL-$610), which I plan to add to our positions at dips below $600.

At its current price around $600, Apple’s new dividend yield is 1.8%. That’s slightly less than the 2.1% yield on the entire S&P 500 group of 500 large stocks but twice that of the sub-sector of technology stocks. My other two favorites in this group, Intel (INTC-$28) and IBM (IBM-$205), yield 3% and 1.5% respectively. These yields are similar to current yields on long-term government bonds and I cannot imagine any good reasons for individual investors to prefer the illusory safety of these bonds.

Dividends count. All studies of the long-range returns on stocks include a significant component of reinvested dividends. As Apple is a much-admired company, it is quite possible that its action will inspire initial dividend payments by other companies. Google (GOOG-$645), as a leading example, bounced up after Apple’s action, apparently inspired by hopes or rumors that it might initiate dividends.

Google’s price bump seems premature although such a move would show a welcome concern for its shareholders. Its search engine business is highly profitable but it devotes much activity to more experimental ventures. Google could easily afford dividends but I prefer Apple stock. Illogically, Apple continues to be valued at more reasonable levels than headline-hunting Google.

Amazon (AMZN-$193) could also join the dividend club but its sky-high valuation of over 100 times earnings is troubling. Amazon is a great company but there are better stock values in abundance.

Two of these continue to be my friendly corporate divorcees-Abbott Labs (ABT-$60) and Conoco Phillips (COP-$76). Both are moving toward their divisions into two companies while continuing to increase their financial results while paying 3.5% dividends.

Apple’s action could renew overall attention to dividend levels, which began to be dismissed as old-fashioned during the dot.com boom of the 1990’s. Going even further back, dividends were of great importance during the roaring 1920’s when there was no SEC to prod companies into releasing information; dividend news was then almost the only indicator to company progress.

A gentleman of the old school who had served on several boards during this period once told me that it was then customary to recess board meetings if the directors elected to omit the dividend. This permitted them to phone their brokers and short the stock. While behavioral traits seem to persist, investors now enjoy more fair play with the SEC and other institutions.

These include the Federal Reserve, which gets its usual criticism during an election year, but should receive some credit for having helped save the global economy. Its continuing policy of active market intervention to keep interest rates low is helping induce signs of economic recovery.

There are even a few signs of revival of that old devil, inflation. That will ultimately force somewhat higher interest rates from today’s record lows. Rising rates savage bond prices and ProShares Ultra Short 20+ (TBT-$20) is a useful hedge against this.

Most investors already have, in effect, an inflation-adjusted bond portfolio through Social Security. Many can profitably ignore the fixed ceilings of investment returns on bonds for stocks with realistic prospects for increasing their dividends. It’s quite nice to have Apple, our largest position, join that club.

I sometimes think that an excessive supply of bright young people eager to use their new MBA degrees may lie behind the dismal record of many corporate buys. Ford, for example, originated the Ford Taurus in 1985 and began to sell millions of this milestone design. Four years later, sales began to taper off under the competitive pressure of new Japanese midsize sedans.

Did Ford invest billions in a new design to continue its sales momentum? Regrettably, no. It spent a mere $100 million for a facelift on the Taurus but $2.5 billion to buy Jaguar. (Having by then owned three Jaguars, I thought this investment was unlikely to succeed.) Still stuck in the same gears, it then spent almost $3 billion to buy Land Rover. Ford sold both companies in 2008 to India’s Tata Motors for $2.3 billion, losing billions on the pair.

Business analysts estimate that about two-thirds of mergers and acquisitions fail. In contrast, I believe that spin-offs or split-ups have a higher success rate, possibly due to the energies unleashed by new management teams. A familiar example is the 1982 divestiture by AT&T of the seven “Baby Bells.”

Last month, I recommended Abbott Labs (ABT-$59) in anticipation of its planned division into two companies: its traditional medical supplies business and its pharmaceutical division. It is up three points since then but I am still adding to positions as Abbott represents an unusual combination of stability and growth together with the prospective catalyst of two companies trading independently. Abbott pays an attractive $.51 quarterly dividend and its stock goes “ex-dividend” on April 11.

ConocoPhillips (COP-$77) is my newest split-up recommendation. The company intends to divide its “downstream” operations of refining and marketing from its “upstream” operations of oil and gas exploration and production. It plans to complete this by the end of the second quarter.

As with Abbott, market history suggests that the sum of the two parts will exceed the parent’s value after the new companies have a few weeks to make their mark. The marketing company will emphasize gasoline sales under its Phillips 66 trademark, established in 1927 when a test car achieved 66 mph on U.S. Highway 66.

To make room for Conoco, I sold our positions in Occidental Petroleum. “OXY” has impressive reserves in development but Conoco is larger, growing even faster at this time, and has both a lower price to earnings and a higher dividend yield of 3.4%. Both Abbott and Conoco intend to maintain a combined total of their current dividend payments after their divisions. Each has an excellent record of dividend increases and I expect this worthy tradition to continue.

It is conceivable that Apple (AAPL-$585) might someday divide into one or more companies but that is hardly in the picture now. Such divisions sometimes occur under the pressure of antitrust complaints, as was the case with AT&T. All of Apple’s lines are in vigorously competitive markets and any such forced split-ups are unlikely.

The stock markets continue to make their best showing in years, aided by the business recovery, low interest rates and persisting reasonable stock valuations. Even the still grim employment figures ticked up slightly. All this points to the first potential whiffs of inflation with accompanying higher rates at some point in the future, probably in 2013.

Higher rates will weaken the values of bonds, a favored investment last year. I am slowly reducing our bond investments while increasing positions in CBRE Global Real Estate (IGR-$8), whose global holdings should keep its 6.7% yield intact. UltraShort 20+(TBT-$21), goes up when bonds go down and may tempt the more aggressive. The stock markets remain favorable and conservative investments in solid stocks like Abbott and Conoco should prove quite rewarding with their possible split-up premiums.

Economic growth continues to build very slowly in this country. Europe still has its problems with Mediterranean economies that seem based on yogurt and pasta but the world’s leading economies from the Group of 20 are increasing their commitments to prevent further damage from the debt crises in the Euro Zone. All together, their efforts are building toward a $2 trillion war chest.

There will doubtlessly be setbacks and panicked “breaking news” but the momentum has shifted. Higher oil prices, brought on by tensions in the Middle East, are a threat to the recovery, with their impact aggravated by the charged political atmosphere of an election year.

As always, investors should try to stay the course, resisting the temptations to zigzag away from transient dangers. Investors have a great advantage over high-speed Wall Street trading desks. Their traders are highly motivated to try to scalp very short-term profits and investors should try to take advantage of the perspective available to them by taking a less frenzied view.

One effect of these trading desks has been a narrowing of the spreads on stocks. As I write, IBM is trading at 198.16 bid, 198.17 asked, about as small as you can get. National Oilwell Varco (NOV-$84), my newest oil services recommendation, is quoted at 84.07 bid, 84.12 asked. Actual trade executions may vary due to the continuing fluidity from large blocks trading quite rapidly. An easy solution in most cases is to use “limit” orders, such as a buy order for NOV at 84.07 or even 84.05.

That’s probably a good idea as NOV has been posting strong results for many years on a broad line of equipment, drills, tubes and other essential components for both land and offshore rigs. Sales and earnings are both growing recently at a 20% clip. Earnings for 2012 will be around $6.00 a share, up 24% as higher energy prices drive its sales. It even has a 0.5% yield.

As reflected on my website, www.crowellroberts.com, I have a continuing interest in seeing opportunities in developing economies. Unfortunately, the picture is often clouded through government control or interference, corruption and a lack of appropriate vehicles.

India’s HDFC Bank (HDB-$34) passes these hurdles. It commenced operations in 1995, following liberalization by India’s Reserve bank of the banking industry. It reported a 31% increase in earnings for the December quarter and I expect continued progress. There is a 3% yield and dividends have been increased for the past 9 years.

U.S. manufacturers are doing well and archetype Indiana-based Cummings (CMI-$121) is increasing sales of its diesel engines at a 35% rate. Earnings for 2012 should be slightly above $10 a share, up 15%. Its stock has enjoyed a good run but an improving economy leaves plenty of room for more.

Government control of companies in China is troubling but its growth cannot be overlooked. I am initiating positions in City Telecom (CTEL-$13), which provides telecommunication services including advanced Internet access in Hong Kong. Sales and earnings are growing at rates in low double-digits with earnings forecast to be $1.18 this year. It has a 5% dividend yield.

Some new technological picks next week. Meanwhile, Digital Realty (DLR-$73) offers a 4% yield from ownership of data centers and other technologically related real estate.

Such speculative chatter makes good cocktail chatter but doesn’t address the fundamental questions as to what actions investors should take as the stock market winds its ways. I consistently recommend that investors stabilize their portfolios with a base of solid, well financed, growing companies.

That advice seems more welcomed in periods of nerve-racking volatility than it does when sustained advances tend to induce complacency. Excitement usually builds first in the technological sector where positions should be anchored with Apple (AAPL-$512) and Intel (INTC-$26).

Apple has been such a spectacular success that it has created its own technological ecosystem. Analysts often tout some lesser stock as being a supplier or potential supplier. That may work but I prefer the real thing and would use any price dips below $500 to add to Apple positions.

Intel dominates its sector. Its earnings will be almost flat this year but it is trading for only 11 times earnings while yielding 3% after raising its dividend for the eighth straight year. It invests more in research than the total sales of many of its competitors and will continue to be an undramatic but rewarding investment.

An improving economy, low interest rates and returning investor confidence will enhance returns on less established tech companies. Solarwinds (SWI-$39), a recently recommended young IT company, is making new highs. Cognizant Technology (CTSH-$70), a much larger IT outsourcer, took a hit last fall on a rare earnings miss but is coming back nicely. Both its forecast earnings growth and P/E ratio are around 20, a good combo.

Oil prices have also been grabbing headlines with crude trading over $100 for sometime, resulting in painfully apparent rises in retail gas prices. This has very little to do with U.S. political actions and everything to do with interruptions and threats of further interruptions in the Middle East, particularly regarding Iran and speculative news stories about its nuclear capabilities.

Chevron (CVX-$108) and Occidental (OXY-$104) are solid performers. Both have excellent records of dividend increases, soothing the nerves of their stockholders as the world oil markets gyrate.

Atwood Oceanics (ATW-$46), an offshore oil driller, is my newest recommendation. No dividend but earnings for 2012 forecast around $4.00, increasing at around a 15% rate thereafter. Finances are sound and the company is taking delivery on newly constructed advanced drilling platforms.

SandRidge Permian Trust (PER-$23) is an oil and gas royalty trust with properties in the Permian Basin in Texas. It is up 35% since my recommendation in October while paying around 9% in royalty distributions. SandRidge is planning another Trust offering, named SandRidge Mississippi Trust II, which should be available to investors in a few months.

Feeding the world provides steadily rising demand for global agricultural suppliers. DuPont (DD-$51) continues to emphasize its hybrid seed and agricultural chemical lines. Swiss-based Syngenta (SYT-$66) attracts little attention from U.S. analysts despite its excellent growth record in improving crop yields.

Deere (DE-$84), a world leader in agricultural equipment, has grown earnings at a compounded rate of 26% for 10 years. All three of these companies provide excellent dividend returns to ease the cyclicality of farming. Investors should expect good harvests from the solidly grounded companies recommended here.