Young Research & Publishing Inc.

Investment Research Since 1978

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Existing Home Sales Plummet

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Existing home sales plummeted 27% in July to a new 15-year low. Existing home sales have now entered double-dip territory. At the current rate of sales, there is a surplus of more than 12 months of existing home supply—a 28 year high. … [Read more...]

Which Portfolio Would You Rather Own?

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Given a choice, most investors would rather own the portfolio represented by the blue line in my chart. But in reality, many own something closer to the portfolio represented by the black line. The black line tracks the performance of the S&P 500. The blue line tracks the performance of a balanced portfolio. The balanced portfolio is invested 30% in corporate bonds, 30% in intermediate-term treasuries, 30% in equities, and 5% each in gold and the Swiss franc. The balanced portfolio is also rebalanced annually. Over the last decade, my balanced portfolio earned a compound annual return … [Read more...]

A Must-Have MLP Fund

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You don’t want to miss the boat on master limited partnerships (MLPs) especially now that the asset class is receiving more press. A recent Wall Street Journal piece by Tom Lauricella and Carolyn Cui, “Frenzy in Energy Partnerships,” shed more light on the relatively unknown natural resource pipeline market, which has been attracting billions of dollars owing to its attractive 6%–7% yield. In fact, as the article points out, through the beginning of this month, MLPs rallied 15% on the year and 11% per year over the past 10—as measured by the industry benchmark, the Alerian MLP Index—for … [Read more...]

This Economy is Booming

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The economic recovery in Brazil continues to gain momentum. Brazilian GDP grew at 11.4% in the first quarter of 2010. Inflation remains tame by Brazilian standards at less than 5%, employment is up smartly, unemployment is at a record low, and consumer confidence is near pre-recession highs. Contrast the strong performance of Brazil’s economy to the record high unemployment, record low employment, and very low consumer confidence in the U.S., and it quickly becomes apparent that investors need to broaden their investment horizon beyond the U.S. Diversification across sectors and market … [Read more...]

An Investment Strategy Guaranteed to Win

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In investing there is only one variable that an investor can control, and that is cost. Cost is vital to your long-term investment success. Lower costs necessarily result in higher returns. There is no disputing this fact. As an example, take two funds with the same gross return, Fund A and Fund B. Fund A has a 1% expense ratio and Fund B has a 2% expense ratio. After fees are deducted, Fund A will return 1% more than Fund B. Anybody capable of basic arithmetic should be able to figure this out. Yet, millions haven’t. The mutual fund industry is jam-packed with high-expense-ratio-load funds … [Read more...]

Creative Destruction

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Creative Destruction – Popularized by Joseph Schumpeter, a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” In just 10 years, two industry titans have been knocked to the floor and replaced by a start-up and another firm that most industry pundits had written-off. The age of the Windows desktop PC is coming to a close and the age of smart phones, tablet computers, and cloud computing is beginning. But don’t put money on it. Microsoft and Dell looked like no-lose … [Read more...]

Wall Street Begging for More Stimulus

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The stock market mounted a powerful rally in July. The S&P 500 jumped almost 7% for the month and has tacked on another 2% so far in August. The rally is most unusual given the raft of weakening economic data that has been reported in recent weeks. My chart shows a marked downtrend in the Citigroup U.S. Economic Surprise Index. The Citigroup index measures the difference between projected economic data and actual economic data. A falling index indicates that economic data is coming in worse than expected. Since expectations are what drive stock prices, a declining surprise index is often … [Read more...]

Back to Even and Then Some

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Are you tired of the media’s nonstop market analysis yet? It’s distracting at best and harmful to your health at worst. With the Dow up 7.1% in the month of July, it’s worth noting how little ground has been picked up from mid-June of this year through the end of July. Even after climbing out of the valley of the March 2009 lows, the price of the Dow is still only worth three-quarters of its value from its October 2007 peak. Those taking a balanced investment approach had a much better experience. I like using the Vanguard Wellesley fund to illustrate the advantages of a balanced … [Read more...]

Wheat Prices Skyrocket

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Wheat prices are up more than 50% in a month. Droughts in Russia, a major world wheat producer, are threatening the country’s crop.  Traders bid up wheat prices in anticipation of tighter supplies. … [Read more...]