The media loves wild swings in the markets. Big up or down days give them something to talk about and ask stupid questions like: “So Bob, it’s been a tough week (blah, blah, blah). What can investors expect when markets open Monday?” Whatever Bob says is often the opposite of what Joe just said. OK now what? The media sets the stage for the one word that wreaks more havoc on investors than any other word in the investing world. And that word is: Inertia—a tendency to do nothing. … [Read more...]
Archives for February 2014
Asia’s River of Gold
Gold’s recent price movements have created a new breed of investor in Asia. With many Chinese shut out of their favored investment, the real estate markets, by increasing government regulation, they are looking for new avenues. Gold is now being sold in more banks, and Chinese investors are snapping it up. To the South West, in India, buyers are paying as much as $160/ounce premium to buy gold after the government put limits on its import. Smuggling seems to be rampant. In Singapore, a Brink’s general manager told Bloomberg “We need additional capacity, so we have to take further space. … [Read more...]
Puerto Rico Downgraded to Junk
As anticipated Puerto Rico’s debt has been downgraded to Junk. Read more here: Standard & Poor’s lowered the debt of Puerto Rico to junk status on Tuesday, sending shock waves through the investor community, which has long enjoyed the tax-exempt interest generated by the island’s municipal bonds. While S.&P. only dropped Puerto Rico’s rating to BB+ from BBB-, the one-notch downgrade has intensified a cash squeeze for the commonwealth, Mary Williams Walsh writes in DealBook. Though much of the island’s debt was issued with promises to make cash payments if it fell below investment … [Read more...]
Buckle Up
Red Jahncke notes that a higher cap gains rate (from 2012 to 2013) may have muted stocks sales last year and that the January 2014 sell-off may be a sign of things to come. Read more here: After last year's low volatility and impressive gains, stock market investors have been whipsawed in early 2014. Stocks dropped sharply in January, with the Dow Jones Industrial Average tumbling more than 5%, and falling again Monday. Yet the roller-coaster ride may just be getting started. Aside from the trouble in emerging markets and slowdown in U.S. manufacturing activity, there is a tax effect at … [Read more...]
Vanguard GNMA’s 7% Spread
Last year the so called smart guys said bonds were dead. They must have forgotten that stocks don’t go up forever. In January the Dow dropped 5%, but Vanguard GNMA gained 2%--a spread or difference of 7%. Not a bad start to the year for Vanguard GNMA. … [Read more...]
Welcome Back!
A dividend centric portfolio should never go out of style. After a rough start to the year in small cap stocks several money managers are buying dividend paying stocks. Welcome back! It’s never too late to find some dividend religion. The WSJ reports: A choppy start to 2014 underscores the need to play defense, say market veterans. Many portfolio managers are shifting away from the kinds of investments that did exceptionally well in 2013 but are vulnerable to large swings. For some, that means paring back on U.S. small-company stocks in favor of shares of large companies with growing … [Read more...]
Young Research’s Retirement Compounders
Young Research’s Retirement Compounders is comprised of dividend paying common stocks selected from the over 40,000 global publicly traded companies. The Retirement Compounders Program favors high dividend payers, those with a history of dividend payments, and companies with a long record of consecutive dividend increases. Some of the companies included in Young Research's Retirement Compounders program have paid a dividend every year for over a century. Others can boast a more than five decade record of annual dividend increases. The combination of high dividend payments today and dividend … [Read more...]