More on Related Themes
2013-10-29 Only RED That You Have Seen in October... by Blaine Rollins of 361 Capital
The markets felt a bit different this week. While equities finished with another weekly gain, it was lead to new highs by a new and interesting cast of characters: the Dow Industrials, Dividend Stocks (like Utilities & Industrials), Germany, the United Kingdom, Gold & Silver, and Long Maturity Treasuries. While everyone under invested in risk is hoping for a pullback, the rest who are equal or overweight seem to be looking to buy on any pullback.
2013-10-28 For Maximum Total Return Go for Growth by Chuck Carnevale of F.A.S.T. Graphs
Not all investors are the same. Therefore, not all investors share the same goals and objectives. Consequently, there are numerous strategies and investing methods available to choose from. Moreover, it also goes without saying that the investment strategy that’s right for me may not be right for you. For that reason, it’s imperative that each individual looks for the strategy that is right for their own individual goals, objectives, risk tolerances and status. By status, I’m referring to how many years you have left before retirement.
2013-09-09 Moving On - Five Years After Lehman by John Petrides (Article)
This month marks the fifth anniversary of the Lehman Brothers failure and the start of worst financial crisis in American history since the Great Depression, and yet to some investors, it seems like only yesterday. Investors still hold onto that period of volatility as if it will happen again tomorrow, paralyzing and confusing their investment decisions. Consequently, many investors have watched from the sidelines as the stock market has recovered solidly year after year.
2013-09-04 Weekly Market Review Notes by Team of Tuttle Tactical Management
In August the US Stock Market had its worst month since May 2012 and there are a bunch of interesting issues going into September, including Syria, Problems in Emerging Markets,and Fed tapering.
2013-09-03 Letter to the Editor by Various (Article)
A reader responds to Geoff Considine’s article, Do Income-Oriented Portfolios Reduce Safe Withdrawal Rates?, which appeared last week.
2013-08-21 Weekly Market Review Notes by Team of Tuttle Tactical Management
This was a tough week for the markets as the long expected and healthy correction finally surfaced. Times like these can be a little nerve wracking is there are always now shortage of people to go on CNBC and claim that the sky is falling.
2013-08-07 Weekly Market Commentary by Team of Tuttle Tactical Management
As I write this the S&P 500 futures are indicating a down open setting us up for possibly three down days in a row. If you watch the financial media someone will undoubtedly talk about how the sky is falling.
2013-08-01 Weekly Market Commentary by Team of Tuttle Tactical Management
The trend in stocks is still up but the rally is still showing signs of being "tired". That should change this week as we have a lot of data coming out about jobs and inflation, the two things that the Fed cares most about and the two things that will impact Fed policy going forward. I would expect large moves one way or the other depending on how the market thinks the Fed will react to the data.
2013-07-26 For A Healthier Portfolio - Look Here by Chuck Carnevale of F.A.S.T. Graphs
The Health Care sector is comprised of many diverse companies, as can be seen from the list of subsectors provided below. Historically the Health Care sector has been comprised of a significant number of companies with above-average growth rates of earnings. Consequently, a majority of the companies comprising the Health Care sector could be thought of as growth stocks over dividend growth stocks.
2013-07-24 Bursting of the Bond Bubble by Clyde Kendzierski of Financial Solutions Group
Our April newsletter focused on the extreme overvaluation in the bond market. I argued that money market funds (or cash) were likely to outperform bonds and bond funds over the next decade. In May I applied the same logic to US stock prices and the inherent fallacy in the prevailing TINA (“there is no alternative” to stocks) hypothesis. Although stocks are likely to outperform bonds over the next decade, both asset classes remain seriously overvalued. In a world of overvalued assets, zero return looks much better than large potential losses even when that means foregoing transitory
2013-07-24 Weekly Market Commentary by Team of Tuttle Tactical Management
Stocks continued to move up this week as money still has no other place to go. However, the rate of incline has slowed quite a bit causing the rally to look a little bit tired leaving the market vulnerable to a correction. That applies to a "normal" market, with "normal" asset classes, and places for traders to put money if they pull it out of stocks. One of the consequences of QE is we no longer have a "normal" market and there is nowhere else to go.
2013-07-10 Weekly Market Review Notes by Team of Tuttle Tactical Management
The Bulls returned to stocks this week and bonds got crushed again. Comments out of the ECB, strong data out of Japan, and a good jobs number contributed to the rally, but at the end of the day the market had gotten a bit oversold. Bernanke is scheduled to speak today so if past history repeats itself things could get interesting again. Next week we will get a bunch of Q2 corporate earnings to that could also have quite an impact on the market either way.
2013-07-03 Weekly Market Review Notes by Team of Tuttle Tactical Management
Last month was the first down month for the market this year. The next few weeks ought to be interesting, we have the monthly jobs number on July 5th when most people are probably on vacation and then corporate earnings start in two weeks. No telling at this point about whether the market will want good news or more of the Goldilocks, not to hot, not too cold, news that could keep Quantitative Easing going. Going forward investors will continue to analyze anything the Fed says for clues.
2013-07-02 Do Dividend-Paying Stocks Have Staying Power? by Nanette Abuhoff Jacobson of Hartford Funds
The role of dividend-paying stocks in a diversified portfolio and the environment in which they are likely to outperform the broader equity market are often topics of debate among investors. I believe there are a number of reasons why a strategic allocation to dividend-paying stocks makes sense.
2013-07-02 Finding Value In The Materials Sector Is A Material Thing by Chuck Carnevale of F.A.S.T. Graphs
This is the third in a series of articles designed to find value in today’s stock market environment. However, it is the second of 10 articles covering the 10 major general sectors. In my first article, I laid the foundation that represents the two primary underlying ideas supporting the need to publish such a treatise. First and foremost, that it is not a stock market; rather it is a market of stocks. Second, that regardless of the level of the general market, there will always be overvalued, undervalued and fairly valued individual stocks to be found.
2013-06-28 Reviewing the Dividend Sell-Off by Jeff Middleswart of Ranger International
Higher yielding stocks outperformed for much of this year, but fell sharply with the pop in interest rates.
2013-06-26 Weekly Market Review Notes by Team of Tuttle Tactical Management
This has been a rough week for the markets. It started when Bernanke spoke (if this keeps up we will have to buy protection before he speaks the next time) and continued with bad economic news out of China. The selloff after Bernanke’s speech looked like a buy on the rumor, sell on the fact event. The selloff after weak China data came out was a good, old fashioned sell off.
2013-06-19 Weekly Market Review Notes by Team of Tuttle Tactical Management
The near term is going to be all about the Fed and what they say about tapering their bond buying. In anticipation the market has rallied from the low it set on June 5th. Markets were oversold but they also seem to be interpreting the Fed’s message as QE is somewhat irrelevant because they will maintain a zero interest rate policy until the unemployment rate hits 6.5%, which isn’t going to happen anytime soon. It also looks like the market doesn’t mind talk about Ben Bernanke leaving in January as he would probably be replaced by Janet Yellin who seems to espouse all the same
2013-06-12 Weekly Market Commentary by Team of Tuttle Tactical Management
This past week has been volatile. Friday’s jobs number ended up being perfect, not to good, not too bad, causing a big market rally. It has to be noted that the two day rally also came when the market was oversold and was a bounce off of the S&P 500’s 50 day moving average.
2013-06-12 5 Reasons Not to Flee Non-US Dividend Stocks by Russ Koesterich of iShares Blog
“As bond yields rise, is it time to flee dividend stocks?” Russ explains why the answer is, no, at least when it comes to international dividend payers.
2013-06-05 Weekly Market Commentary by Team of Tuttle Tactical Management
Yesterday ended the streak of up Tuesdays in the market while last week saw an acceleration in the the "crush anything that pays any sort of yield" theme. Treasuries, high yield bonds, preferred shares, Utilities, REITs, etc. all got killed. At this point this just seems like the weird type of dislocation that happens sometimes in markets where money just doesn’t want to go anywhere except under a mattress.
2013-06-03 Treasury Bonds Are No Longer the Conservative Investor's Friend by Jeff Middleswart of Ranger International
For more than three decades, conservative investors have been able to count on Treasury bonds to deliver a consistent income stream, while providing a safe repository for principal. Further, Treasuries have anchored portfolios over their long bull run by limiting the damage when stocks declined.
2013-06-03 Getting Better Returns from Dividend Stocks - Look for Growth by Steve Wenstrup of Tillar-Wenstrup
While some investors have begun to return to US Equity (funds) there is still a large amount of money on the sidelines. End of year 2012 data shows investors have trillions in money markets and savings accounts. While there is no guarantee all that money will make its way back into the market the matriculation has begun.
2013-05-31 The Fixation on the Fed: 3 Investing Implications by Russ Koesterich of iShares Blog
Hypersensitive investors are reacting to every utterance from central banks like the Federal Reserve and the Bank of Japan. Russ shares three investing implications of this fixation.
2013-05-29 Weekly Market Commentary by Team of Tuttle Tactical Management
Last week we talked about the market being overbought in the short term, so the three day selloff (Wednesday-Friday) was to be expected. The media will blame the Fed but they didn’t tell us anything we didn’t already know. Bottom line, when the market gets extremely overbought traders will use anything and everything as an excuse to take profits. Interestingly, last week was the first streak of three down days this year. The S&P 500 seemed to find some support at 1640.
2013-05-22 The Right Question by Team of Tuttle Tactical Management
As the market continues to make new highs the arguments about whether stocks can go higher or the rally will end become more interesting. As usual in any debate about the market, both sides can make a great case. There are a number of factors that I could point to that suggest stocks have room to run but there are also a number of troubling signs on the horizon that could stop the rally in its tracks. Investors almost always get drawn into this debate and most of the people I talk to are pessimistic that this rally can continue.
2013-05-15 Weekly Market Commentary by Team of Tuttle Tactical Management
We have been talking about some troubling divergences in the market for the past couple of weeks. These have worked themselves out--- Small and mid cap stocks are now outperforming the S&P 500 over the past week and month and Treasury Bond yields are coming back up.
2013-05-07 Attractive Dividends? Earnings Growth? A Way to Get Both by Team of Lord Abbett
International equities provide broader opportunities for combining appealing divided yields and earnings growth.
2013-04-24 The 5% Problem: Double Jeopardy for Traditional Bond Investors by Nathan Rowader of Forward Management
Investors have suffered with low yields, but profited from rising bond values during the 30-year bull market for bonds. We believe the bond market is moving into a bearish phase, putting the value of existing bond holdings at risk. A variety of income-producing options are available for those who want to diversify bond portfolios and seek better yields. Historical analysis shows that a diversified portfolio would have outperformed traditional bonds during the last bear bond market and in periods of rising interest rates.
2013-04-12 The Truth About The Impact Of Dividend Reinvesting by Chuck Carnevale of F.A.S.T. Graphs
What follows will be several examples of different kinds of dividend paying stocks offered in order to provide deeper insight into several commonly held notions. With each example, I will focus on how much return comes from dividends and how much comes from capital appreciation. I will also illustrate the precise benefits and effects of dividend reinvestment as it applies to different types of dividend paying stocks.
2013-04-03 Weekly Market Review Notes by Team of Tuttle Tactical Management
After hitting a record close last week the market is showing some warning signs, which is to be expected. You don’t typically break through an important resistance point without testing it and re-testing it so some volatility around a record high is normal. We are also slightly concerned that small and mid cap stocks have drastically underperformed the S&P 500 over the past two days.
2013-03-27 Weekly Market Review Notes by Team of Tuttle Tactical Management
The continuing mess in Cyprus and the S&P 500 nearing a record close dominated the news this week. As I said last week, Cyprus is insignificant, the only important aspects of what is going on is timing. If the crisis hit the news during a time when the market was oversold and due for a rally then it would have little, if any, impact. The fact that that market has rallied this year without much of a selloff gives traders an excuse to use something like this to take profits.
2013-03-20 Weekly Market Review Notes by Team of Tuttle Tactical Management
The banking crisis in Cyprus dominated the news this week as the market sold off 3 days in a row after being up 10 days in a row. The selloff was blamed on what was going on in Cyprus but that was not the real story. Globally Cyprus is pretty insignificant, most people probably don’t even know where it is. The real story is that markets just don’t go up for 10 straight days without needing a breather from time to time, Cyprus was just an excuse to take some profits.
2013-02-16 How To Remain Solvent Longer Than The Market Is Irrational by Team of F.A.S.T. Graphs
I believe it is extremely important that investors focus on the value of what they own more than they do on the day-to-day machinations of price volatility. However, I also believe, and even recognize, that very few investors are capable of ignoring volatile stock price movements. When the price of a stock that they own is rising or falling, especially when the swings are large and/or violent, it is very difficult for people to maintain a steady head and hand. Instead, emotions take over reason which often cause otherwise rational investors to make irrational decisions.
2013-02-06 Market Commentary by Matthew Tuttle of Tuttle Tactical Management
The long awaited sell off finally came this week as the market suffered its worst day since November. The decline seems to have somewhat solved the overbought situation as the market rallied back the next day.
2013-01-16 Haka Politics and the Slow Crawl by Christian Thwaites of Sentinel Investments
In the last few months we have seen the rise of Haka politics. Familiar to any All Blacks fan, this is the ritualistic Maori war dance, full of noise, bluster and theater. But it rarely intimidates and most opponents sit it out with some amusement. So it is with the political interventions last year. We saw countless announcements and intentions from EU leaders and solemn pledges with little follow-through. And in the US we had a soporific election and a squalid squabble over the fiscal cliff that caught the public but not the market's attention.
2013-01-15 Land of the Rising Dead by Christian Thwaites of Sentinel Investments
Yes, you knew we were going to talk about Japan. It's all the rage and the big standout in market performance in the last few weeks. Since November the broad Nikkei-225 average has risen 24% because there's new thinking in town. It's hard to describe Japan's 20 year malaise. Once proud companies shaken, the shattering of a property market and total collapse of stocks. Even if the market rises at the same level of the last few months, it will take six years to re-reach its peak. A more reasonable 10% growth rate will take 14 years. Weird things happen when economies enter deflation.
2013-01-04 Newsletter by Harold Evensky of Evensky & Katz
As always I hope you will enjoy this issue, as much as I have enjoyed putting it together. Most important though I wish one and all a very happy, prosperous and healthy new year!
2013-01-03 5 Investment Ideas for a Post-Fiscal Cliff Deal World by Russ Koesterich of iShares Blog
As discussed in previous posts, Congress kicked off the New Year with a bare bones deal to avert (or at least delay) the fiscal cliff. Though markets responded positively to the news Wednesday morning, the euphoria isn't likely to last.
2012-12-26 Gundlach's High-Conviction Investment Idea by Robert Huebscher (Article)
Count Jeffrey Gundlach among those who expect Japan's currency to collapse because it can't service its debt. Japan's challenges may parallel those that the US faces, and Gundlach feels strongly that they have created a compelling investment opportunity.
2012-12-18 Jeremy Siegel on 'Dow 15,000' by Robert Huebscher (Article)
Jeremy Siegel was one of very few individuals to have correctly predicted the strong performance of the equity markets over the last year. The Wharton professor and author of the renowned book, Stocks for the Long Run, forecasts continued strong performance for the year ahead.
2012-12-07 3 Implications of a Fiscal Cliff Tax Hike by Russ Koesterich of iShares Blog
From the outside, its hard to find much evidence that Washington is getting closer to a fiscal cliff deal. Perhaps there is more going on behind the scenes than the headlines suggest, but as of today it is hard to find much evidence that the odds of a deal have risen. As the potential for fiscal drag rises, it is worth reiterating why this is so dangerous. From my perspective, the biggest risk to the economy, and to financial markets, comes from the tax side of the equation.
2012-11-27 The Superiority of Dividends: A Comparison of Value Strategies by Geoff Considine (Article)
Dividend-focused strategies have won the allegiance of many prominent investors, including Rob Arnott, Bill Gross and Jeremy Siegel. Others claim value-based strategies offer superior risk-adjusted returns. Both sides can claim a partial victory in this debate, but I will show that, when understood properly, dividend strategies offer a crucial edge - one that many investors will find attractive.
2012-11-17 Election Dividends by Sean Bonner of Carne Capital
As the market continues to sell off, these are names to keep an eye on. The performance of high dividend paying stocks can be expected to remain volatile for the near future, both to the upside and downside. The selling may continue to feed on itself, but if a deal on dividend tax rates can be reached these names may at least revert to the mean and outperform the broad market.
2012-11-15 3 Reasons Not to Flee Dividend Stocks by Russ Koesterich of iShares Blog
As the fiscal cliff approaches, investors are becoming wary of dividend stocks, unsettled by the potential for a near tripling of the tax on dividends. But Russ K explains why he remains comfortable with dividend paying stocks with one major exception.
2012-11-14 Helplessly Hoping...That a Market Riot Isn't Needed for Fiscal Cliff Fix by Liz Ann Sonders of Charles Schwab
A status-quo election puts the "fiscal cliff" front and center. The stock market's knee-jerk reaction was to sell; could further weakness light a fire under politicians? Good news has come from recent economic numbers, but sentiment will remain under pressure until the fiscal cliff is resolved.
2012-10-12 The Fiscal Cliff and Your Portfolio by Travis Fairchild, Patrick O'Shaughnessy of O'Shaughnessy Asset Management
Whether or not we find ourselves staring over the fiscal cliff come January 1 is still very much in question, but investors are understandably concerned with what the resultant tax increases may mean for their portfolio values and dividend income. If Congress is unable to reach a compromise between now and January 2013, President Bush's 2003 tax cuts will expire and tax rates on income, dividends, and capital gains will increase by significant margins.
2012-10-09 Dividend Income: Music to Our Ears by ClearBridge Advisors (Article)
The hunger for income among investors is helping put dividends in the spotlight, say Hersh Cohen and Mike Clarfeld of ClearBridge.
2012-10-09 A Q3 Letter to Clients - Insights from a Wall Street Legend by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients an overview of the past 90 days and the outlook for the period ahead. In it, I draw upon investing principles articulated by the legendary Barton Biggs, who passed away earlier this year.
2012-10-09 High-Dividend Yield Strategy under the Microscope by Michael Nairne (Article)
High-dividend yield stocks have become the favorite recommendation of a host of advisors, but an undue focus on income alone obscures the irreducible fact that long-term investment success is based on the total return of a portfolio including both income and capital growth. This raises two questions. How has the total return of a high-dividend yield strategy fared relative to the market? How does its total-return performance compare to the returns of other possible stock-selection strategies?
2012-09-28 The Danger of Safety by Owen Murray of Horizon Advisors
Investors have become cautious and anxious following the bear market of the past twelve years and the recent bouts of extreme volatility. We examine risks and opportunities in light of the difficult market environment in our special report The Danger of Safety."
2012-08-27 Copeland White Paper I: Dividends and Tax Rates by David McGonigle of Copeland Capital Management
As it stands today, barring a political compromise, the highest tax rate payable on dividends will jump from 15.0% to 43.4% for the 2013 tax year. That sets up two important questions for investors in dividend-oriented strategies.
2012-06-13 The Tip of the Iceberg For Dividend Stocks by Team of Columbia Management
Post-crisis equity investors seek to lower portfolio volatility. Dividend stocks have provided higher returns with less risk compared with non-dividend payers. Baby boomers are retiring now with much smaller nest eggs than they had anticipated. They need reliable sources of income and growth. Cash-rich companies are in a position to pay and potentially grow dividends, while dividend payout ratios are historically low. Active managers leverage in-depth research to uncover promising opportunities among companies likely to initiate or raise dividends.
2012-06-05 Finding the Best Dividend Fund by Geoff Considine (Article)
Assets are flowing into dividend-stock funds. But many experts are warning that those investors are setting themselves up for significant losses. Using an objective methodology that assesses tradeoff between yield and risk, we can determine those funds that investors should prefer - and a few they should avoid.
2012-05-30 Navigating the Equity Market by Pamela Rosenau of HighTower Advisors
Between now and the Greek election on June 17th, I expect we will see a consistent negative bias in the equity market. According to Citigroup global equity strategist Tobias Levkovich, sentiment has shifted rapidly from complacency in March to panic in the latest readings of their Panic/Euphoria Model. He adds that these readings are a contrary indicator, in addition to valuation metrics, arguing statistically that we may see market gains over the next two or three quarters.
2012-05-29 What Does a Dividend Tax Hike Mean for Dividend-paying Stocks? by Steve Chun (Article)
The Bush tax cuts are due to expire at the end of this year, but owners of dividend-paying stocks need not be afraid. Historically, changes in tax regimes have had little effect on the value of the aggregate stock market. Historical data show that even vulnerable asset sub-classes - high-yield stocks, for example - have not lost value long-term as a result of similar tax increases.
2012-05-25 Going Defensive With Dividend Funds by Russ Koesterich of iShares Blog
With markets likely to remain volatile in the near term, investors should consider dividend paying stock funds as a defensive play.
2012-04-12 Volatility Is Not Risk by Chuck Carnevale of F.A.S.T. Graphs
Rogers blog dealt with his feelings about a recurring theme in Barrons over the weekend referencing peoples complacency for risk. The first part of his writing dealt with the risks associated with the utilization of puts. On this subject, Roger and I are in agreement. However, the second part of his blog talked about what he felt was the great risk of using dividend paying equities as an alternative investment choice. The following analysis utilizing the F.A.S.T. Graphs earnings and price correlated research tool illuminates the important parts that I feel Roger left out.
2012-04-03 A Q1 Letter to Clients: Bernanke, Buffett and Siegel on the Prospects Ahead by Dan Richards (Article)
Here is a template for a letter to serve as a starting point for advisors looking to send clients a summary of what's happened in the past 90 days and the outlook for the period ahead.
2012-03-15 Where to Look for Dividends? Try Outside the US by Russ Koesterich of iShares Blog
With the dividend corner of the US equity market now crowded and expensive, Russ gives three reasons why investors might want to consider looking abroad for dividend income. More Reasonable Valuations: Outside of the US, dividend paying stocks still appear cheap and are trading at a significant discount to the broader equity market. More Attractive Yields: Non-US dividend companies are offering more enticing yields. Outperformance in a Slow Growth Environment: high dividend paying stocks tend to outperform during periods of slow growth like the one were experiencing this year.
2012-03-09 Investors In Common Stocks Must Get Valuation Right; Heres How by Chuck Carnevale of F.A.S.T. Graphs
Investors should be careful and willing to always run the numbers out to their logical conclusions. But, it all starts with knowing what you are buying (investing in) in the first place. True investors, like Peter Lynch, and many of the other renowned investing greats such as Phil Fischer, Warren Buffett, etc., all invest as owners in businesses with a focus on the strength of the business behind the stocks they buy. Therefore, these investor greats are always buying the earnings power of the respective businesses they are investing in, relative to their goals and objectives.
2012-02-28 Dividends: Proposed New Tax Rates by Robert McConnaughey of Columbia Management
We are in a very attractive period for dividend paying equities. With yields from higher credit quality bonds at historical lows, an investing public hungry for income has to consider an increased allocation to equity income. The backdrop is positive for them to do so with healthy cash flows and historically low payout ratios creating a solid foundation for reliable and growing dividend yields. Given the strong outperformance of the highest current yielders in 2011, we continue to advocate seeking out companies with the ability to grow their dividends sustainably in the future.
2012-02-03 Sentinel's Top 10 Predictions For 2012 by Christian W. Thwaites of Sentinel Investments
i) the US is emerging stronger from this recovery than any other major economy ii) Europes woes are temporarily eased and iii) China is past the worst of its inflation scares. If that sounds muted, it is. The damage done to the economies through irresponsible lending and uncontrolled asset price inflation (the US) or unencumbered vendor financing and overvalued exchange rates (EU) was immense. Both meant huge banking messes. And households are the only ones who clean up banking messes. In time. Slowly. And thats where the world stands.
2012-01-13 The Top 25 Best Dividend Challengers To Buy Today by Chuck Carnevale of F.A.S.T. Graphs
This is the third and final article of a series of articles we have prepared on dividend paying stocks with a history and legacy of increasing their dividends each year. Our first article covered Dividend Champions, dividend paying stocks with a history of increasing every year for 25 years. Our second article covered Contenders, companies that have increased their dividend every year for 10-24 years. This final article in the series will cover\ Challengers, companies that increased their dividend every year for a minimum of five, to up to nine consecutive years.
2011-11-08 A Unique Way to Help Clients Close the Retirement Gap by Dan Richards (Article)
Clients facing a shortfall in retirement savings can bridge that gap in many ways. But one technique is often neglected: spending reductions - even small ones - in their everyday lives. A new web site gives clients the tools to quantify and manage those reductions.
2011-11-01 The Danger in European Stocks by Geoff Considine, Ph.D. (Article)
European equity prices, depressed by fears of a sovereign debt crisis, are cheap to such a degree that William Bernstein, author of The Intelligent Asset Allocator, called them a true bargain. Income-oriented investors, in particular, may be tempted by 4.2% dividend yields and a market-wide P/E ratio of approximately 11. My analysis, however, contradicts Bernstein's and shows the underlying risk those investments carry.
2011-10-11 A Q3 Client Letter Drawing on Buffett’s Optimism 'The U.S. is coming back now' - and why three inves by Dan Richards (Article)
Since 2008, each quarter I have posted a template for a letter to clients; these are consistently among my most popular articles. This quarter's letter provides clients with perspective on the recent market turmoil.
2011-09-22 Dividends: Paid To Wait and Poised to Rally by Mike Boyle of Advisors Asset Management
There are myriad clichs that capital market participants and commentators like to call on from time-to-time to help soothe the pain or illustrate the potential for gain. One that we believe applies on almost any given day concerning dividend paying stocks is, paid to wait. However, there are certain times, like now, when we think we can add the addendum, and poised to rally. We have been discussing for quite some time that we thought the U.S. equity markets were attractive based on current valuations and earnings growth (both current and projected), and that is still the case.
2011-09-16 Dividend Growth Investing: Understanding style and stock selection risks by Kevin Feldman of iShares Blog
In my last post on the resurgent popularity of dividend investing, I talked about why the strategy of buying dividend aristocrats has surged in popularity over the past decade. This time Id like to explore the challenges of picking individual stocks and the risk in shunning growth for value. First, remember that not all dividend stocks are created equal. Second, do you really want to be in the stock-picking business?
2011-09-07 Keep Calm, Carry On by Scott Minerd of Guggenheim
The markets overreaction has created an incredible opportunity in U.S. equities. In particular, I see value in high-dividend stocks. Many companies with strong cash flows and stellar credit ratings pay more in dividends than the yield on their bondsa situation that hasnt existed for such a large number of stocks since the 1950s. Without doubt, Europes problems indicate that further turbulence, even a retest of recent lows on the S&P 500, cannot be ruled out. Nevertheless, for investors with 2- to 5-year horizons, price dips represent buying opportunities.
2011-09-02 Dividend Growth: Volatile markets revive an old investing strategy by Kevin Feldman of iShares Blog
Lately I've been hearing a lot about the new dividend growth strategy: Simply buy the right blue chip stocks featuring rising dividends and youll be on the path to a more secure retirement. With regular headlines like Top 20 High Yielding Dividend Aristocrats and 10 Dividend-Paying Blue Chips for Your Parents, its no wonder Im hearing people at dinner parties buzzing about Coke (KO), J&J (JNJ) and P&G (PG) in a way that reminds me of my grandparents stacking up their stock certificates to keep up with dividend checks from these venerable value giants.
2011-08-23 Why Investors are 'Mad as Hell' – And what you can do about it by Dan Richards (Article)
Last Friday, Jason Zweig of the Wall Street Journal wrote about fear and anger as the two dominant attitudes of American investors today – fear about their future and anger at those they see as responsible for the latest crisis. Today's investor psyche has fundamental implications that will require changes in how you interact with clients. Before getting into how to respond, let’s look at what's driving today's mindset.
2011-07-26 Jeremy Siegel - Why I Changed My Mind about Index Funds by Dan Richards (Article)
Jeremy Siegel, the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania, discusses what caused him to reject capitalization-weighted market indexes and what he chose instead. This is a transcript of the interview.
2011-07-26 Letters to the Editor by Various (Article)
A reader responds to our article, Gundlach: A Debt Ceiling Impasse Could Drive Rates Lower, which appeared last week. Another reader responds to Don Moir's letter to the editor, which was in response to Doug Short's commentary, A Short History of Dividend Stocks, which appeared on July 5.
2011-07-12 An End-of-Quarter Letter to Clients by Dan Richards (Article)
Given recent unrest in Europe and uncertainty about economic growth, many clients are looking to their advisors for direction. This template for an end-of-quarter letter is a starting point for your own letter to clients, one that can be a catalyst for a conversation about how to position portfolios.
2011-07-12 Letter to the Editor by Various (Article)
A reader responds to Doug Short’s commentary, A Short History of Dividend Stocks, which appeared on July 5.
2011-06-07 Has the hour of the dividend stock arrived? by Team of Columbia Management
Surveying the present financial landscape-what are investors’ options? Bonds have been enjoying historic popularity. But they are at market highs and come with return and income potential inherently capped by their coupons. Turning to Treasuries, the price-to-yield is particularly unattractive. Then there’s the specter of interest rate risk. The steep rebound of equities off the crisis bottom ended with the arrival of 2010, and double-digit returns for many formerly cheap stocks went with it. Following a period of volatility, we appear to have settled into the slow-growth stage.
2011-01-25 The Power of Dividends by C. Thomas Howard (Article)
New evidence refutes long-held beliefs about the role of dividends. Research shows that the higher a stock portfolio's dividend yield, the greater its return. And just as surprising are new findings about the relationship of dividends to volatility.
2011-01-04 Building a Better Income Portfolio by Geoff Considine, PhD (Article)
One of the greatest concerns for income-oriented investors is the possibility that dividends will be cut. The financial crisis showed that traditional metrics, such as a stock's dividend history and its payout ratio, failed to warn investors of impending dividend cuts. By evaluating stocks based on volatility, however, investors can select securities that are more likely to maintain or improve their dividend rates.
2010-12-28 The Ten Most-Read Articles in 2010 by Robert Huebscher (Article)
As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months. In decreasing order, based on the number of unique readers, those are...
2010-10-29 Asset Allocation in an Uncertain Economy by Robert Huebscher (Article)
Advisors should not bet on whether the recession will be L-, V-, or W-shaped. Instead, Ron Albahary said they should use strategic asset allocation and overweight or underweight those asset classes that have historically done well at certain points in the economic cycle. Albahary is the CIO of Convergent Wealth Advisors, a Washington, DC-based wealth manager.
2010-10-19 Tales of the Bull and Bear Bond Market by Kendall J. Anderson of Anderson Griggs
The investment advisory business is competing to capture retirement dollars by offering new products that emphasize income. The greatest risk to any retiree is running out of money before they die. Most retirees understand this, so the idea of income for life sounds wonderful. What good is a guaranteed income payment, however, if the payment is not enough to cover the future cost of living? Current interest rates will not allow adequate income from bonds, or protect against the risk of inflation.
2010-10-12 How Not To Get Screwed by the Bond Bubble by Isbitts of Emerald Asset Advisors
Bond funds, particularly those that invest in U.S. Treasury securities and other types of bonds at the low end of the risk spectrum, have seen piles of new cash in 2010. Whether it is through long-short funds, arbitrage, multi-strategy or 'equity surrogates' like convertibles and REITs, however, it is possible to create a portfolio with a low standard deviation without having to be trapped by a low fixed rate and the threat of rising bond prices.
2010-08-11 Not in Kansas Anymore by David A. Rosenberg of Gluskin Sheff
The transition to the next sustainable economic expansion and bull market in these types of business cycles takes between five and 10 years, and is fraught with periodic setbacks. While an underweight positions in equities still makes sense, a bar bell between basic materials and defensive dividend stocks is a prudent strategy, with the overall emphasis in the asset mix tilted towards bonds, especially the BB-rated sliver or that part of the higher quality non-investment grade space that currently has the greatest unexploited potential for spread compression and capital gains.
2010-07-12 Recession Odds Still on the Rise by David A. Rosenberg of Gluskin Sheff
The Economic Cycle Research Institute's weekly leading index fell again last week despite the equity market bounce. The spot index fell 0.6 percent for the second week in a row, and the growth index slipped to -8.3 percent from -7.6 percent at the end of June. While this is the only indicator so far suggesting that recession odds are rising, once you get to -8.3 percent, looking at the historical record, downturns occur more often than not.
2010-07-06 The Ultimate Income Portfolio by Geoff Considine, Ph.D. (Article)
Conventional approaches to constructing income-oriented portfolios use either bonds or high-yield stocks. In this article, Geoff Considine explores a compelling alternative to that approach: a carefully selected model high-yield portfolio consisting primarily of low-beta, high-dividend stocks, against which the investor sells call options.