All major U.S. stock indices closed lower last week with the exception of the small-cap Russell 2000, which gained 1.2%. Recent market weakness has left the Russell and tech-heavy Nasdaq 100 as the only two in positive territory for 2015. This is actually a subtle positive for the overall market heading into the second quarter, because technology and small-cap issues typically lead. As I said last week: “As long as technology and small-cap issues continue to outperform the broader market, as has been the case thus far this year, I view the recent weakness as a temporary countertrend correction rather… Read More

All major U.S. stock indices closed lower last week with the exception of the small-cap Russell 2000, which gained 1.2%. Recent market weakness has left the Russell and tech-heavy Nasdaq 100 as the only two in positive territory for 2015. This is actually a subtle positive for the overall market heading into the second quarter, because technology and small-cap issues typically lead. As I said last week: “As long as technology and small-cap issues continue to outperform the broader market, as has been the case thus far this year, I view the recent weakness as a temporary countertrend correction rather than a sustainable decline.” #-ad_banner-#From a sector standpoint, only health care and financials posted gains last week. Two of the weakest sectors were energy and materials, both of which have been adversely affected by recent strength in the U.S. dollar. It appears that the greenback has been influencing a lot more than just these two sectors though. My work shows that the currency is currently inversely correlated to a number of commodity prices, including crude oil, copper and the CRB Index, and positively correlated to the U.S. stock market. Influential U.S. Dollar at a Critical Level This week’s first chart… Read More

About a year ago, our colleague Frank Bermea, publisher of StreetAuthority’s sister company, Profitable Trading, met a man named Jared Levy, who knows more about options trading than anyone we’ve ever met. #-ad_banner-#Jared is something of a wunderkind. He began trading options at age 16 and quickly found himself making upward of $600,000 a year. Nowadays, you might find him regularly featured as a guest on financial news programs like CNBC or Fox Business. (In fact, he appeared on Fox Business, to discuss Apple, among other things. You can check out the video at… Read More

About a year ago, our colleague Frank Bermea, publisher of StreetAuthority’s sister company, Profitable Trading, met a man named Jared Levy, who knows more about options trading than anyone we’ve ever met. #-ad_banner-#Jared is something of a wunderkind. He began trading options at age 16 and quickly found himself making upward of $600,000 a year. Nowadays, you might find him regularly featured as a guest on financial news programs like CNBC or Fox Business. (In fact, he appeared on Fox Business, to discuss Apple, among other things. You can check out the video at this link.) If you’ve been a regular reader of StreetAuthority Daily, then you know that we’ve been growing concerned about the possibility of a market correction. No, I’m not saying you should sell all of your investments and run for the hills (yet), but you need to have a plan for when this bull market turns on its head. Jared agrees. In fact, in his second official issue of Profit Amplifier, a new options service launched by our friends at Profitable Trading, Jared warned his readers about… Read More

As key indices continually reach new all-time highs, some analysts predict that we are in an unstoppable bull market. #-ad_banner-#But others argue that valuations are being manipulated by easy money policies and share buyback programs, which will result in an imminent market crash. As an average investor, it is hard to forecast where the market is going and, thus, where to invest. My answer: ignore the talking heads and follow my secret signal to solid investments and outsized gains. This signal is based on one simple truism: humans are wired… Read More

As key indices continually reach new all-time highs, some analysts predict that we are in an unstoppable bull market. #-ad_banner-#But others argue that valuations are being manipulated by easy money policies and share buyback programs, which will result in an imminent market crash. As an average investor, it is hard to forecast where the market is going and, thus, where to invest. My answer: ignore the talking heads and follow my secret signal to solid investments and outsized gains. This signal is based on one simple truism: humans are wired to act in their own self interest. No one invests their own hard-earned money — or even the money they’ve earned easily — in the hope of anything other than the best possible return. Where your heart lies, there your treasure will be also. That bit of investing wisdom, paraphrased from the Book of Matthew, was true when it was written and is still true today. Consider the CEO of Company X. His stock price is in the proverbial toilet. He can’t get a break on Wall Street, and the problems… Read More

A classic Twilight Zone episode entitled “A Most Unusual Camera” posed an interesting question. If you could take pictures of events that have not yet happened, then what kind of pictures would you take? The characters in that episode took the camera to the race track and snapped photos of the race results — from tomorrow’s races. Investors might be tempted to take pictures of tomorrow’s stock prices. #-ad_banner-#Well, some investors do try to game the system that way, using historical data to predict tomorrow’s hot stocks. It’s called seasonal investing and can involve anything from how a specific set… Read More

A classic Twilight Zone episode entitled “A Most Unusual Camera” posed an interesting question. If you could take pictures of events that have not yet happened, then what kind of pictures would you take? The characters in that episode took the camera to the race track and snapped photos of the race results — from tomorrow’s races. Investors might be tempted to take pictures of tomorrow’s stock prices. #-ad_banner-#Well, some investors do try to game the system that way, using historical data to predict tomorrow’s hot stocks. It’s called seasonal investing and can involve anything from how a specific set of stocks perform around a certain event, to how specific industries perform during certain times of the year.  There has actually been a great deal of analysis on this subject. Ontario, Canada-based investment adviser Brooke Thackray publishes an annual guide entitled “How to Profit from Seasonal Market Trends.” This year’s version, which spans more than 200 pages and can be bought on Amazon.com, runs through a broad range of trading strategies that can be deployed month after month. In fact, this approach underpins the Horizons Seasonal Rotation ETF (Toronto: HAC), which trades on the Toronto Stock Exchange. (Call your broker… Read More

#-ad_banner-#At this point in President Obama’s first term, the world looked very different. The still-anemic economy made it hard to fathom how we would ever get out from under a crushing government debt load. Government spending far surpassed revenue and concerns grew that our key financial backers (such as Chinese bondholders) would pull the rug out from under us. Fast forward to 2015, and the notion that our national debt is any sort of real problem has simply vanished. Sure, the Republican party has been recently threatening government agency shutdowns, but this time the issue is immigration… Read More

#-ad_banner-#At this point in President Obama’s first term, the world looked very different. The still-anemic economy made it hard to fathom how we would ever get out from under a crushing government debt load. Government spending far surpassed revenue and concerns grew that our key financial backers (such as Chinese bondholders) would pull the rug out from under us. Fast forward to 2015, and the notion that our national debt is any sort of real problem has simply vanished. Sure, the Republican party has been recently threatening government agency shutdowns, but this time the issue is immigration and not our nation’s unstable finances. The percentage of Americans that believe that deficit reduction should be Washington’s top priority has slid to a recent 64%, from 72% in 2013, according to a recent survey conducted by Pew Research. However, events across the Atlantic Ocean could bring this issue right back onto the front pages. Make no mistake, decent economic growth, coupled with somewhat higher tax rates on people making more than $250,000 a year, has helped narrow the annual shortfall. What was a $1.4 trillion annual budget gap in fiscal (September) 2009 is now much smaller. A… Read More

I was fortunate to have begun my career during the dot-com boom. It taught me how to successfully navigate a market during a forming bubble… and its eventual bust. #-ad_banner-#The most important lessons I learned on the floor during those years were to watch closely for bubbles, be careful of crowded trades and always anticipate the crowd’s future movements. While they may seem obvious, all three can be extremely difficult to accomplish when you’re in the heat of the moment; especially if you tend to be an emotional trader. Following these tactics allowed me to make money during the late… Read More

I was fortunate to have begun my career during the dot-com boom. It taught me how to successfully navigate a market during a forming bubble… and its eventual bust. #-ad_banner-#The most important lessons I learned on the floor during those years were to watch closely for bubbles, be careful of crowded trades and always anticipate the crowd’s future movements. While they may seem obvious, all three can be extremely difficult to accomplish when you’re in the heat of the moment; especially if you tend to be an emotional trader. Following these tactics allowed me to make money during the late 1990s and 2000s, a historically turbulent time. I’m not bringing this up to pat myself in the back. It’s because what I’m seeing in the market today is eerily familiar. Specifically, one of my favorite indicators is pointing to a bubble in U.S. equities. As I mentioned previously, the forward price-to-earnings (P/E) ratio is at extreme levels. The last time it flashed its current reading was at the end of 2009, and within six months, the market had undergone a correction. The previous time it was even close to this high was in October 2007, when stocks began a 17-month,… Read More

Income investments are an important portion of any retirement portfolio. Historically, they’ve provided retirees monthly or quarterly income distributions to help cover expenses, healthcare and any other living expenses. #-ad_banner-#The other morning I was perusing a Morgan Stanley Smith Barney report that outlined four different 401(k) allocations. While there are many factors that go into an individual investor’s asset allocation, the portfolios range from 25% to 60% in income producing bonds. Along with bonds, the portfolios invest anywhere from 10% to 54% in large-cap stocks. Assuming that part… Read More

Income investments are an important portion of any retirement portfolio. Historically, they’ve provided retirees monthly or quarterly income distributions to help cover expenses, healthcare and any other living expenses. #-ad_banner-#The other morning I was perusing a Morgan Stanley Smith Barney report that outlined four different 401(k) allocations. While there are many factors that go into an individual investor’s asset allocation, the portfolios range from 25% to 60% in income producing bonds. Along with bonds, the portfolios invest anywhere from 10% to 54% in large-cap stocks. Assuming that part of the reason for investing in these types of assets is to add income-producing securities to your portfolio, a logical question to ask is: Do these models account for the lower yields that we’re seeing in the current environment? I doubt it. If you’re trying to earn income by investing in large-cap stocks and bonds, you face serious obstacles. Mainly that yields are down across the board…   The average yield in the S&P 500 is only 1.9%. At that rate, you’re not even keeping up with inflation. Read More

Less than a year ago, over 35,000 people flocked to the “Woodstock for Capitalists” just for a chance to sit in on a six-hour Q&A with the world’s greatest investor — Warren Buffett. #-ad_banner-#To give you an idea of what kind of spectacle this is, just look at sales for Berkshire-owned Nebraska Furniture Mart located in Omaha where the Berkshire Hathaway shareholder meeting takes place every year. In the week surrounding the prestigious shareholder meeting, Nebraska Furniture Mart did over $40 million in sales… which is typically what they do in one month. The… Read More

Less than a year ago, over 35,000 people flocked to the “Woodstock for Capitalists” just for a chance to sit in on a six-hour Q&A with the world’s greatest investor — Warren Buffett. #-ad_banner-#To give you an idea of what kind of spectacle this is, just look at sales for Berkshire-owned Nebraska Furniture Mart located in Omaha where the Berkshire Hathaway shareholder meeting takes place every year. In the week surrounding the prestigious shareholder meeting, Nebraska Furniture Mart did over $40 million in sales… which is typically what they do in one month. The shareholder meeting is one of the greatest financial-education experiences in the world. Attendees get peppered with useful financial information about not only Berkshire, but investing and the economy as a whole. Here are a few great tips that he shared at his recent shareholder meeting. Using Insurance “Float” For Success “Our investment in the insurance companies reflects a first major step in our efforts to achieve a more diversified base of earning power.” — 1967 Annual Report Insurance is Berkshire’s core operation and the engine that has consistently propelled their… Read More

Currently, the Federal Reserve is crushing savers and income investors by keeping interest rates near zero. #-ad_banner-#But the good news is that there are dozens of safe ways to make 10 times more than you would by investing in a CD or a Treasury bill. In fact, there are currently 288 stocks that yield more than 10%, 173 that yield more than 12% and 95 yielding 15% or more. While not all stocks yielding double digits are good investments, owning a handful of reliable dividend payers is the safest, easiest way to build wealth. Read More

Currently, the Federal Reserve is crushing savers and income investors by keeping interest rates near zero. #-ad_banner-#But the good news is that there are dozens of safe ways to make 10 times more than you would by investing in a CD or a Treasury bill. In fact, there are currently 288 stocks that yield more than 10%, 173 that yield more than 12% and 95 yielding 15% or more. While not all stocks yielding double digits are good investments, owning a handful of reliable dividend payers is the safest, easiest way to build wealth. n fact, 156 years of data prove that owning dividend paying stocks and reinvesting those dividends beats all other investment approaches hands down. If you’re skeptical consider this: Anyone who invested $1,000 in the S&P 500 in 1950 would have $1,033,799 today as long as they reinvested the dividends. Without dividend reinvestment, that figure shrinks to a measly $117,471. So why does investing in dividend payers make such a difference? Because these are the stocks that often perform the best, even during periods of extreme market turmoil. Take… Read More

These days, investors are bombarded with a lot of chatter from the market. #-ad_banner-#The internet, TV and radio are flooded with so-called “experts” claiming to know the future of the economy and offering varying opinions on where investors should place their hard earned dollars. On any given day, you might come across a dozen articles online claiming the market is in-store for a major bull run, only to see a news report claiming the next recession is just around the corner, not even an hour later. With the market presenting you… Read More

These days, investors are bombarded with a lot of chatter from the market. #-ad_banner-#The internet, TV and radio are flooded with so-called “experts” claiming to know the future of the economy and offering varying opinions on where investors should place their hard earned dollars. On any given day, you might come across a dozen articles online claiming the market is in-store for a major bull run, only to see a news report claiming the next recession is just around the corner, not even an hour later. With the market presenting you such a mixed bag of opinions, how are you to know what investments you can actually trust? Simple: just ignore it completely. Now, I know that might sound like a stretch, but trust me, it isn’t. The market — and its thousands of pundits — often panders to what I think is an investor’s absolute worst enemy: their emotions. Whether its fear, optimism, excitement or panic, many investors have a way of letting their emotions completely cloud their judgments. And often times, that can cost them a big… Read More