The current sentiment of the media seems to be nothing but doom and gloom. Many of them are worrying about a double dip recession. They feel that we are just beginning to come out of the recession and are still on the precipice. They feel that any slight push or draft will force us back over the edge, into the deep dark hole of another recession. The stock market and its managers seem to be feeding off of this sentiment.

A true contrarian loves this time of negative sentiment. They are actually optimists at heart who see buying opportunities around every negative corner. Jeff Sommer is the author of The Art of Contrarian Trading. This is a blog devoted to contrarian thinking. In his latest article dated July 6, 2010 he discusses the buying opportunity provided by the current media attack.

Mr. Sommers indicates that one article in The Economist shows a shark cutting through the water on its cover page. The caption talks about the hidden danger in today’s market. Mr. Sommer says that the stock markets 15 percent drop in May, 2010 reinforces the reluctance of the average investor to ‘get back into the water’. He goes on to say that this reluctance is a truly great buying chance for the contrarian investor. If they are not already fully invested in the stock market, and making money, they should certainly do so now. His feeling is that the stock market is merely positioning itself for a sustained climb upward.

There are many articles which support this theory by Mr. Sommers. The author of an article on the Equity Clock states that the markets have been oversold and he feels that they are due for a bounce. He does feel however, that this bounce may be short term leading up to the earnings release period.

This attitude can probably be traced to last quarter’s positive earnings release. If the reporting companies can continue to sustain the growth begun in previous quarters, then I feel you will see the private sentiment to begin to improve. Then the market will continue its upward climb to very profitable heights.

Mr. Sommers also indicated that the option trading is pointing to a bullish sentiment. Initial suggestions indicate a buying signal. His advice is to remain defensive in high quality dividend paying stocks.

So I would suggest that your ought to consider yourself as a contrarian. The best time to buy is when everyone else is selling. This is indicated in Its A Wonderful Life when Mr. Potter tries to buy up the town during the great depression. He certainly saw a buying opportunity when it presented itself.

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The stock market has certainly had an up and down tendency during the year 2010. I have written some articles about this volatility in the year 2010. With both “finding dividend paying stocks” and the article “predicting stock market returns” I talked about what to do to make profits with the current situation. I also wrote about doing the opposite with “contrarian investing”.

I wanted to discuss further dividend paying stocks. It seems that this selection is even more important with the current situation in June, 2010. We have certainly had a rocky road with our investment strategy. One sector that a person should look into would be the utility stocks. They, like many other sectors, are currently beat up. Yet even with this, they are a good value due to the amount of dividends they pay.

In the June, 2010 edition of Utility Forecaster, the author Roger Conrad discussed his feelings on utility mutual funds. It is his feeling that the managers are doing nothing more than churning their stock holdings to try and make it to the top of the heap. They do not stick around long enough to collect the dividends and they also rack up enormous fees. He feels that an investor can do better if they just trek out on their own. They can do their own research and determine those companies which are the most stable and have a long-term history of paying dividends. Even with this he does have some recommendations on some Utility ETF’s. You can find his article at.. [updating]

There are many different utility and telephone companies which have consistently paid high dividends. One of these companies I found is “CEL” which is actually a wireless telecom company in Israel. Since 2007 they have paid 12 percent dividends. This is not a bad return and with the increase in stock price as a boot, how can you go wrong. The company seems to have some risk since it is based in Israel, and one never knows what is going to happen there. However, the point is that there are other utility and telecom companies which provide these high dividends.

It would be my suggestion that you use a screen filter to find oversold, dividend paying stocks which have a consistent history of paying their dividends. You do need to be careful when selecting your dividend paying stocks. There was a recent article in the Wall Street Journal which discussed dividend paying companies which decided that they would discontinue the paying of dividends due to cash flow problems. You will never actually know if a company is going to experience this problem, but if you look for at least five to ten years of dividend paying history and a good solid company with a believable financial record, then the chances are better than most that they will continue to pay dividends.