Up until now, my only exposure that I was intent on holding (aside from trading) was RDN.
Today I started buying financials. I bought WFC, BAC, and USB. I plan on putting x% of my portoflio into these 3 stocks everytime they drop y% (if they do). I will average into them over the next months/years depending on prices. Slowly but surely I will accumulate these types of companies and hold them for the very long term.
I still think we're headed lower - possibly much lower - which is why I am taking my time. However, if the multi-year market low is near, I would just kick myself for not buying at least SOME at these relatively low prices! Regardless of timeframe I think that this cycle will play itself out, and that the long-term after-tax CAGR's will be very good.
In order to in at get good prices on solid world class large cap companies, you have to buy when "there's blood in the streets". These opportunities don't come often.
I won't be buying more RDN because the risk is very real and far greater than a company like BAC.
If you are buying depressed financial stocks, take a look at DCS. This closed-end fund has a heavy concentration in financials (32%), trades at a 12% discount to NAV and yields 8.2%. The fund is advised by famous value investor David Dreman, who has a strong long-term record. The remainder of the fund is composed of dividend-paying blue chips like Altria (MO) and Conoco (COP). I bought some DCS last fall at less than $15/shr. and I will collect dividends, while waiting for a rebound to the high teens or twenty.
I agree that the financial sector is looking cheap, but we all know how markets overreact, so the sector will probably get cheaper. I am holding back most of my dry powder for now (RDN being an exception).