You can stack the odds in your favor. At its root, buying above average yields means the “market” or index yields less. Your task is to root out the higher yields, a contrary stance, and pick the winners from there. Your work has just begun. Because relying simply on the highest dividend yields is a fool’s errand. If the top dividend payers were always the top performers then investing would be easy. You and I know that’s false. What Dick Young has taught you, and tens of thousands of investors like you, is that a large part of investing involves art, not science. In baseball, there’s … [Read more...]

Markets have become more volatile in 2018 than they have been for some time. I hope you'll reread this post I wrote on September 7, 2018 and reevaluate the risk in your portfolio today.  I have written to you before about my unease with program trading, especially stop losses (see here and here). Add to that the algorithmic groupthink of computerized trading and it's a nasty brew. Today the Wall Street Journal's Stephanie Yang reports: On Feb. 5, the Dow Jones Industrial Average suffered its worst one-day point-decline in history amid a tumultuous week for global markets. Although the … [Read more...]

At Yoursurvivalguy.com, I regularly warn you away from the novel, the trendy, and the unproven strategies that keep the Wall Street fee-machine cranking. I want you to survive the investing gauntlet, not to be chewed up by schemers or inept profiteers looking to take your money. Risky hedge funds, cryptocurrencies, and unsavory pension fund strategies are all traps I have encouraged you to avoid. If you've been investing over the last decade you have surely heard of Bernie Madoff and his scheme to defraud investors. But if you have been investing for a bit longer like me, you'll remember a … [Read more...]

I've written to you many times about the scary truth behind the S&P 500. The reality is, if you're buying a tracking fund, you're really putting your faith in the few stocks that dominate the value weighted index. Now that those big stocks are getting slapped with reality, the underbelly of index investing is being laid bare. Aimee Picchi, writing at CBS MoneyWatch calls it "the hidden bear market." She writes: No bull: More than two-thirds of the S&P 500's individual stocks are now either in a "correction" or a bear market. More than 350 companies out of the 500 tracked by the … [Read more...]

You wouldn’t know it if you rely on CNBC for your financial news, but outside of a select group of U.S. growth stocks, global equity markets are down YTD. The MSCI All-Country World Index is down 2.4% for the year, while the same index excluding U.S. stocks is down 9.34%. Emerging equity markets have already dipped into bear market territory (down 20% from high), and developed equity markets outside of the U.S. are not far behind, falling 15% from their January peak. Two thirds of the 3,000+ stocks in the FTSE All World Index (similar to the MSCI All Country Index) are down … [Read more...]

Despite offering no-fee stock trades, Robinhood Markets is still getting paid. The company is using a controversial process called "payment for order flow," to generate revenue. Despite its "free" trades, investors should always remember that there's no such thing as a free lunch. Bloomberg's Simone Foxman, Julie Verhage and Suzanne Woolley report: Here's how it works: Retail brokers like Robinhood focus on recruiting customers and building the trading interface, but don't actually execute their clients' orders. They outsource that to firms—including Citadel, Two Sigma and Wolverine … [Read more...]

Once America’s most venerable industrial company, GE has been a disaster. Former CEO Jeff Immelt oversaw the firm’s fall from grace, and his replacement, John Flannery, has been even worse for shareholders. GE shares are down 54% over the last twelve months. The board has finally woken up to the mess and fired Flannery. Larry Culp will become the new CEO. Culp had success as CEO of Danaher, and he is not a life-long GE insider. Ed Crooks reports at FT: Mr Culp said in a statement: ““GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be … [Read more...]

When most people think of fast food they immediately think "unhealthy." As obesity rates rise, some Americans have developed an obsession with finding healthy food, and anything foods with a reputation for unhealthiness have been shunned by many people. To combat its unhealthy image, McDonald's has removed the artificial ingredients from its burger, taking out such appetizing sounding additives such as calcium propionate and sodium benzoate. Julie Jargon reports on the move for The Wall Street Journal, writing: Those and other ingredients found in the buns, cheese and sauce on some of … [Read more...]

Customers are demanding instant gratification when it comes to the delivery of their products, and Home Depot is stepping up its efforts to fulfill their desires. Matthew Townsend reports at Bloomberg that Home Depot "has started same-day delivery across the U.S. to help it stay relevant with consumers’ need-it-yesterday mentality." The move is a strategy to compete with fast-delivering e-commerce sites such as Amazon. Townsend writes: The home-improvement chain had already been using trucks to deliver large items such as building materials from stores in a day or so. Now, aided by … [Read more...]