stocks

Beating the Dividend Income Drought

Will dividend yields test 1999 lows? That was the title of my post from a few weeks ago in which I explained to readers how the dividend income drought facing investors continues into 2014. Interestingly, the Federal Reserve’s initiation of ZIRP (zero interest rate policy) on Dec. 16, 2008 wasn’t the beginning of the bear …

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3 Big Shortcomings of Target Date Funds

Around 41% of all 401(k) savers have are using target-date mutual funds (TDFs) and the numbers keep rising. Experts in the financial services industry applaud this trend, but are target-date funds really the panacea to a secure retirement income? TDFs attempt to match a person’s age and risk tolerance with a projected retirement date. For …

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Smart Beta Investing: New Paradigm or Word Trick

Is so-called smart beta investing a new and improved way to invest or just another one of Wall Street’s fancy sales pitches? Smart beta strategies (formerly known as “fundamental indexing”) in the investment world generally fall into two camps: 1) Indexes that use a one-dimensional or simple formulas, like equal weighting all the stocks within a benchmark like the …

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Chinese Stocks are a Wonderful Value Trap

When it comes to properly assessing China’s stock market, are financial experts bad or just blind? Here’s what they’ve been saying: Buck the Trend, Buy Chinese Stocks – Forbes, Jim Oberweis, 7/9/13 Huge Reforms in China Could Lead to Big Upside for Top Chinese Stocks – 247wallst, 11/19/13 It’s Time to Buy China – MarketWatch, …

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2 Easy Ways to Add Commodities to Your Portfolio

Commodities have outperformed stocks since the start of the year, but many investors have not benefited. Why? Because if there’s one category where most investment portfolios are lacking market exposure, it’s probably commodities.  Unless you live on a farm, most of us don’t have enough storage space for 150 barrels of crude oil (NYSEARCA:USO) or …

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Stock Market Fear is Tapering, Greed is Back

The stock market’s wild mood swings from fear to greed and back are in full swing again. And this time around, the investing public’s fear of missing out on potential stock gains is greater than its fear of losing money. The latest Fear and Greed Index shows that stock market greed is now at extreme …

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Does the Sleeping Giant (VIX) Have More Upside?

Like a sleeping giant, stock market volatility can hibernate, but it never goes away. Right now, the giant is showing signs of awakening and whether the beast completely tramples the city is yet to be determined. Although the S&P 500 (^GSPC) hit all-time highs near 1,859 last week, a number of flashing indicators we’ve written …

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Will Dividend Yields Test ’99 Lows?

The past six years have been brutal for dividend and income investors. Zero percent interest rates have depressed bond yields (NYSEARCA:BOND) and with major stock indexes (^DJI) now trading at all-time highs, dividend yields relative to prices have fallen too. Last year, the number of S&P 500 (NYSEARCA:SPY) stocks paying a dividend touched a 17-year …

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Valuation Models Say Stock Market Losses Ahead

Overpaying for anything is a bad idea. But it’s an especially bad thing when it comes to investing in the stock market. James Montier at GMO correctly observes: “Over the years I’ve witnessed many attempts by the practitioners of this most dark art to justify why tried and tested measures of valuation are no longer …

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Is this the Weakest Bull Market in History?

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one,” said Charles MacKay in his classic book the Madness of Crowds. A closer examination of the U.S. stock market’s (NasdaqGM:QQQ) action shows how the herd is …

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China’s Busted Bank Loans Hit 2008 Crisis Levels

Depending on whom you believe, China is either on the verge of economic utopia or a major economic shock. And the data is leaning toward the latter. Non-performing loans made by Chinese banks soared to $97.5 billion in the final three months of last year, according to the China Banking Regulatory Commission. That matches levels …

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Portfolio diversification

Are Covered Call Funds a Smart Income Play?

What’s better? A covered call options strategy executed by the individual investor or a covered call ETF or fund that proposes to do the heavy lifting? Selling covered calls is a popular investment technique used by investors with high income or cash flow as their primary goal. The investor is “covered” because they own the …

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MyRA is Dead on Arrival

During his State of the Union address, President Obama unveiled his new plan to increase retirement savings. The plan is dubbed “MyRA” and is geared for people without a company sponsored retirement plan. Sadly, MyRA is more than a futile attempt at preventing people from retiring without money. It’s another shining example of grandstanding and …

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Who Turned Up the (Trading) Volume?

Price changes in the stock market occur on all-time scales. From a tick in milliseconds all the way to decades and even centuries, prices have a certain pattern. And behind all these constantly influx price changes is trading volume. Why does it matter? Trading volume refers to the number of shares or contracts traded in …

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Wall Street is Still Optimistic, Should You Be Too?

Never mind the S&P 500’s (^GSPC) mild nosedive. Wall Street’s analysts are still cheerleading stocks for 2014 as if nothing has changed. How bullish are they? Among Wall Street’s analysts, 18 out of 21 predict a 3% or greater increase for the S&P 500 (NYSEARCA:SPY) in 2014.(see table below) One of the most bullish 2014 …

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Emerging Market Stocks: Bargain or Value Trap?

I was recently lectured on Twitter by a Wall Street strategist about why emerging market stocks (NYSEARCA:EEM) are a raging buy. Among his top arguments for being and staying long were extremely negative sentiment and chart patterns. He was particularly adamant about “depressed values” in Chinese stocks. Interestingly, the view among other strategists that emerging …

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Have Bullish Sentiment Extremes Caught Up with Stocks?

Memo to equity bulls: 2014 is not 2013. And thus far, it’s been a bumpy road for stocks. The  S&P 500 (NYSEARCA:SPY) broke below 1,800 for the first time this year. Have bullish sentiment extremes finally caught up with the stock market? AUDIO: Listen to Ron DeLegge @ The Index Investing Show Via our Technical …

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Is Stock Market Sentiment Too Complacent?

Here’s your “lost decade” update: The S&P 500 (ChicagoOptions:^GSPC) has risen nine out of the past 10 years and in 2013 just posted its best yearly performance in a decade. Have stock market investors become spoiled and overconfident? Measuring the stock market’s mood or “sentiment” through news headlines, surveys, and data give us clues about …

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Gold Miners Are Beating the S&P 500

If you drop a penny from your pocket, it will be a very small bounce. But if you drop the penny from atop the Empire State Building, the magnitude of the bounce will be great. In the case of mining stocks, that bounce from a very long and painful fall has been so great – …

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