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Archives for May 2011

Dividend Increases

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According to Standard & Poor’s, 2011 is setting up to be an excellent year for dividend increases. To date, at least 150 companies have increased their dividends. And that’s with less than half of the year gone by. That’s a solid pace, considering that 256 companies increased their dividends in all of 2010. But don’t be fooled by headlines promoting big increases. Even an impressive 20% increase like the one Cablevision announced on Wednesday can leave investors wanting more, since it still only yields 1.7%. On the flip side, National Bankshares Inc. increased its dividend by only … [Read more...]

The Key to a Financially Secure Retirement

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Fidelity Investments, the nation’s top provider of retirement savings plans, reported that the average 401(k) balance reached a record high at the end of the first quarter. A record high—that sounds impressive. What was the average 401(k) balance? $74,900. When you consider that the median age of American workers is about 41, $75,000 is inadequate.  The average American is unprepared for retirement. He has too little saved, and he isn’t saving enough from current income to make up for the shortfall. USA Today reports that most employees enrolled in 401(k) plans have opted for a 3% savings … [Read more...]

From Raging Bull to Angry Bear

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The raging bull market in silver has turned into an angry bear. Silver is down 5% this morning and more than 30% from its high only two weeks ago. The abrupt reversal is nothing short of spectacular—to watch of course. Investors who bought physical silver, or worse yet, margined silver futures, just took a savage beating. … [Read more...]

A Warning from Dr. Copper

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Copper is said to have a PhD in economics. Why? Copper is a vital component in the construction, electronics, transportation, and industrial machinery industries. When copper prices move, savvy investors take notice. What is copper saying about the economy now? Economic momentum is slowing. Check out my chart. Copper has a real shaky look. Today, the industrial metal closed at a five-month low and decidedly below its 200-day moving average. The 200-day moving average is a key technical indicator used to identify trend reversals. If the trend in copper does indeed reverse, you can expect the … [Read more...]

Coal, an Export Story

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Over the past year U.S. exports of metallurgical coal (met-coal) have nearly doubled in dollar terms. Increased trade of metallurgical coal, used in the steelmaking process, has led to consolidation in the coal mining industry as major players scale-up to meet the demands of globalized competition. Toward that end, Arch Coal (NYSE:ACI) announced a deal to buy International Coal Group (NYSE:ICO) on May 2, pushing ICO’s price up 32.23% last week, making it this week’s Market Mover. Arch Coal’s management estimates that world steel consumption will increase by 60% over the next decade, and … [Read more...]

A Compulsive Liar

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Meet the stock market: he’s a valuable economic indicator, but he also has a tendency to lie—even compulsively. The stock market misdirects, misleads, and misinforms. The only time to rely on the stock market is when he is accompanied by his more honest older brother. The stock market’s older brother will let you know if his devious younger sibling is telling you the truth or feeding you a tall tale. Who is the stock market’s more trustworthy older brother? The bond market. The bond market keeps his younger brother in line. If the stock market signals that the economy is getting better by … [Read more...]

Jobless Claims Surge to 8 Month High

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Weekly jobless claims rose to an 8 month high this week. The Labor Department attributed the increase to a number of transitory factors. Even though transitory factors may explain this week’s jump, the trend in the four week moving average is now decidedly up. Are jobless claims signaling that the recovery is stalling? … [Read more...]

Cheeseburger in Paradise

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Your financial freedom is at the mercy of a politicized Federal Reserve seemingly more interested in recapitalizing big Wall Street banks than helping you maintain your purchasing power. Near-zero interest rates and a declining dollar turn their lunch into a cheeseburger in paradise while you’re stuck brown-bagging it. The Fed’s dual mandate of full employment and price stability hasn’t exactly materialized, as unemployment logs in at about 9% (11% in Rhode Island), and searching for lower prices has become the great American pastime. Meanwhile, balanced economic growth, which is part of … [Read more...]