Most investors know well that healthcare spending is on the rise. But it’s less well publicized that one of the fastest-growing subsets of healthcare is mental health and addiction treatment, often combined under the umbrella moniker “behavioral health.” Spending on mental health and substance abuse treatment more than doubled over the past 12 years and now represents a $250 billion market in the United States; analysts expect the sector to grow in the high-single-digit percentages for the next several years. One reason is the growing awareness and diagnosis of psychiatric illnesses, along with declining stigma associated with seeking treatment. More… Read More

Most investors know well that healthcare spending is on the rise. But it’s less well publicized that one of the fastest-growing subsets of healthcare is mental health and addiction treatment, often combined under the umbrella moniker “behavioral health.” Spending on mental health and substance abuse treatment more than doubled over the past 12 years and now represents a $250 billion market in the United States; analysts expect the sector to grow in the high-single-digit percentages for the next several years. One reason is the growing awareness and diagnosis of psychiatric illnesses, along with declining stigma associated with seeking treatment. More than 18% of American adults suffer from diagnosable mental illnesses; about 4% have been diagnosed with a serious mental illness. Depression alone is a $23 billion industry. And four of the 10 leading causes of disability in the United States are mental illnesses. #-ad_banner-#Government policy has also helped the sector grow: in 2008, the federal Mental Health Parity and Addiction Equity Act required insurance companies to cover mental illness and addiction as medical problems. The Affordable Care Act required mental health coverage as part of the new exchange system as well. Substance abuse treatment, while a relatively small part of… Read More

Last week, I provided updates on three recommended stocks. Today, let’s follow suit with three of the income-oriented stocks I’ve recommended in recent months.  Emerson Electric (NYSE: EMR), which I recommended in this article, is a diversified electrical-equipment conglomerate that sells products and services in industrial process management, automation, climate control, network support, power technology, motors and construction and maintenance tools. The company markets its products in more than 150 countries. It’s been hurt by the oil and gas sector’s weakness; declining demand from China, Brazil and other emerging markets; and the strong dollar, which boosts relative prices of Emerson’s… Read More

Last week, I provided updates on three recommended stocks. Today, let’s follow suit with three of the income-oriented stocks I’ve recommended in recent months.  Emerson Electric (NYSE: EMR), which I recommended in this article, is a diversified electrical-equipment conglomerate that sells products and services in industrial process management, automation, climate control, network support, power technology, motors and construction and maintenance tools. The company markets its products in more than 150 countries. It’s been hurt by the oil and gas sector’s weakness; declining demand from China, Brazil and other emerging markets; and the strong dollar, which boosts relative prices of Emerson’s products for international buyers. #-ad_banner-#Emerson is unlikely to stage a strong earnings rebound until the oil and gas sector recovers. But analysts think that could happen this year, and in the meantime Emerson will muddle through just fine thanks to its strong market shares in myriad businesses. I also expect surprisingly good results from its electrical equipment used in the renewable energy industry. And as I wrote in December, with Emerson you get paid while you wait. Emerson shares yield 4.2%, supported by strong cash flows. The company has increased its dividend for 59 years in a row, a streak… Read More

The market’s ups and downs this year show no sign of abating — in fact, S&P 500 volatility is in a strong uptrend that may continue for some time. Until calm prevails, a smart investor’s best bet is to pick up shares of stocks that have been unfairly beaten down and use their high quality to ride out the waves. Of course, such a strategy takes some fortitude and patience. A few weeks of high volatility, including nausea-inducing market drops of several percentage points a day, can seem like years. But a few months from now, we may well look… Read More

The market’s ups and downs this year show no sign of abating — in fact, S&P 500 volatility is in a strong uptrend that may continue for some time. Until calm prevails, a smart investor’s best bet is to pick up shares of stocks that have been unfairly beaten down and use their high quality to ride out the waves. Of course, such a strategy takes some fortitude and patience. A few weeks of high volatility, including nausea-inducing market drops of several percentage points a day, can seem like years. But a few months from now, we may well look back at the prices created by this correction and wonder why we didn’t buy more. #-ad_banner-#In recent months, I’ve pointed out many high-quality bargain stocks — market leaders with strong brands, rock-solid balance sheets, robust cash flows and other sterling qualities. Some have performed well; others are testing our patience. Let’s take a look at how three of them have performed — and whether or not they remain “Buys” today. 3M (NYSE: MMM), which I profiled here, has rallied impressively from its January lows and has performed fairly steadily even on major down days in the market. I expect the… Read More

Imagine a sailboat on a calm, windless day. Not much movement, right? Now picture a seven-mile-per-hour steady breeze filling the sails. See the boat moving steadily across the water? #-ad_banner-#From an investment standpoint, that’s the difference between a good company in a slow-growth industry and a good company in a fast-growing industry. Stocks with the wind at their backs move higher faster. They’re less dependent on good luck, and they’re less vulnerable to bad news.  So regardless of short-term market dynamics or medium-term economic cycles, it’s almost always a good time to invest in reasonably priced stocks benefiting from long-term… Read More

Imagine a sailboat on a calm, windless day. Not much movement, right? Now picture a seven-mile-per-hour steady breeze filling the sails. See the boat moving steadily across the water? #-ad_banner-#From an investment standpoint, that’s the difference between a good company in a slow-growth industry and a good company in a fast-growing industry. Stocks with the wind at their backs move higher faster. They’re less dependent on good luck, and they’re less vulnerable to bad news.  So regardless of short-term market dynamics or medium-term economic cycles, it’s almost always a good time to invest in reasonably priced stocks benefiting from long-term trends. The “graying of America” is one of the most-cited trends. Investors are starting to catch on to the long-term potential of alternative energy, too. Another strong long-term trend worth attention is the continued rise of robotics, or automation, in everyday life. Industrial processes have used robotics for many years, replacing factory workers with machines that can perform assembly tasks quickly and precisely without getting tired. There are well over 200,000 robots in industrial use around the world today, primarily in the manufacturing of automobiles, electronics, metals and chemicals. Robots are also used routinely now in medical, energy exploration and… Read More

A sharp market correction affords keen-eyed investors buying opportunities for suddenly undervalued stocks, as we found throughout January. But what to do when the market starts to rebound? Shares of high-quality companies often bounce back beyond bargain levels before the rest of the pack. Is it truly too late to find short-term winners? After all, the market remains way below its recent highs. What’s the best way to identify those stocks likely to lead the averages in the coming weeks and months? #-ad_banner-#One answer: relative strength. Relative strength is an indicator of a stock’s performance relative to a benchmark, normally… Read More

A sharp market correction affords keen-eyed investors buying opportunities for suddenly undervalued stocks, as we found throughout January. But what to do when the market starts to rebound? Shares of high-quality companies often bounce back beyond bargain levels before the rest of the pack. Is it truly too late to find short-term winners? After all, the market remains way below its recent highs. What’s the best way to identify those stocks likely to lead the averages in the coming weeks and months? #-ad_banner-#One answer: relative strength. Relative strength is an indicator of a stock’s performance relative to a benchmark, normally a broad stock index such as the S&P 500. If, say, Microsoft shares are up 10% over a two-week period and the S&P 500 is up 5% during that period, Microsoft’s Beta (a measure of relative strength) is 2.0 during that time. It’s a strong indication that — at least in the short run — investors are more enthusiastic about Microsoft than they are about the market as a whole. Why? For our purposes, that doesn’t matter. All we need to know is that Microsoft is exhibiting relative strength vs. the market. What’s key here is that history shows that… Read More

Smart Beta exchange traded funds (ETFs) have been around since 2003, but they’ve exploded in popularity in the past year. Several major investment product providers, including Franklin Templeton, Legg Mason, John Hancock and Goldman Sachs, have all moved recently to introduce new Smart Beta ETFs. Let’s try to understand why — and how you can use them to make big bucks in a volatile market. #-ad_banner-#First, a few terms you should know: •    ETF: An exchange-traded fund tracks an underlying index, portfolio or commodity but trades like a security on a stock exchange. It can be bought and sold throughout… Read More

Smart Beta exchange traded funds (ETFs) have been around since 2003, but they’ve exploded in popularity in the past year. Several major investment product providers, including Franklin Templeton, Legg Mason, John Hancock and Goldman Sachs, have all moved recently to introduce new Smart Beta ETFs. Let’s try to understand why — and how you can use them to make big bucks in a volatile market. #-ad_banner-#First, a few terms you should know: •    ETF: An exchange-traded fund tracks an underlying index, portfolio or commodity but trades like a security on a stock exchange. It can be bought and sold throughout the day like a stock.  •    Beta: A statistical measure of the volatility of an individual stock (or other security, index or portfolio) versus a given benchmark, such as the S&P 500. When measuring a stock’s volatility versus the S&P 500, for example, the S&P 500 has a Beta of 1.0. If the stock has a Beta of 1.5, it means that stock tends to be 50% more volatile than the S&P 500, in the same direction. If the S&P 500 goes up 10%, the stock tends to go up 15%. A stock with a Beta of 2.0 would tend… Read More

Driven by the vicious bear market in Chinese stocks, U.S. stocks have suffered through a correction and heightened volatility this year. Against a backdrop of a relatively healthy U.S. economy, smart investors are using the correction as a buying opportunity for high-quality stocks that are suddenly — and unjustifiably — selling at bargain prices. #-ad_banner-#Another way to approach stocks now is to focus on industries with the wind at their backs, regardless of what happens to the major stock indices on any given day, week or month. You wouldn’t know it from the financial headlines, but there are trends more… Read More

Driven by the vicious bear market in Chinese stocks, U.S. stocks have suffered through a correction and heightened volatility this year. Against a backdrop of a relatively healthy U.S. economy, smart investors are using the correction as a buying opportunity for high-quality stocks that are suddenly — and unjustifiably — selling at bargain prices. #-ad_banner-#Another way to approach stocks now is to focus on industries with the wind at their backs, regardless of what happens to the major stock indices on any given day, week or month. You wouldn’t know it from the financial headlines, but there are trends more long-lasting and powerful than the January Selloff of 2016. Like the snow piled high in the Northeast this week, the memory of this correction will eventually melt away. But the secular trends driving stocks in certain sectors higher will remain. Healthy Profits In The Middle The single most powerful and predictable long-term trend in the U.S. economy is the aging population. The Baby Boom population is moving into its senior years, with 10,000 Americans turning 65 every day. By 2030, more than 20% of the population will be over 65 years old and more than a third will be… Read More

As global stocks markets continue to fall, investors are increasingly nervous — and for good reason. Losses are hard to take, even if they’re only (or mainly) on paper. And it’s only natural to see day after day of stock market declines and worry that the trend will continue. I’m not going to deny the negative emotional consequences of the market’s recent swoon. Hey, I’m feeling it too. But applying reason in an emotional situation is what successful investing is all about. And reason dictates that an overall market decline can create bargains for anyone with cash on the sidelines,… Read More

As global stocks markets continue to fall, investors are increasingly nervous — and for good reason. Losses are hard to take, even if they’re only (or mainly) on paper. And it’s only natural to see day after day of stock market declines and worry that the trend will continue. I’m not going to deny the negative emotional consequences of the market’s recent swoon. Hey, I’m feeling it too. But applying reason in an emotional situation is what successful investing is all about. And reason dictates that an overall market decline can create bargains for anyone with cash on the sidelines, ready to buy — as I discussed earlier this week. #-ad_banner-#In recent articles, I’ve recommended several high-quality stocks that are trading at attractive prices thanks to the market’s declines (and in most cases for no reason related to the company’s own fundamentals). And now that the selloff is officially a correction, down more than 10% from its recent high, more bargains are emerging every day. What really excites me when stocks get cheaper is the opportunity to buy shares of companies that usually aren’t on sale, because they’re so darn good they usually trade at an expensive premium. Here are… Read More

“Buy when there’s blood in the streets.” Of all the investing aphorisms, it’s probably the most valid. It’s only logical that when the whole market suffers a sharp selloff, some individual stocks must get caught up in the carnage despite their individual characteristics. When the market calms down, they’ll rebound. By that logic, this is a terrific time to hunt for bargains. The market is off to its worst start of a calendar year ever, down 8% in only 10 days. It’s an emotional reaction to the market meltdown in Chinese stocks, and perhaps a shift in asset allocation now… Read More

“Buy when there’s blood in the streets.” Of all the investing aphorisms, it’s probably the most valid. It’s only logical that when the whole market suffers a sharp selloff, some individual stocks must get caught up in the carnage despite their individual characteristics. When the market calms down, they’ll rebound. By that logic, this is a terrific time to hunt for bargains. The market is off to its worst start of a calendar year ever, down 8% in only 10 days. It’s an emotional reaction to the market meltdown in Chinese stocks, and perhaps a shift in asset allocation now that interest rates have risen, even if only slightly. But it’s certainly pulling down some excellent stocks that are now available at much lower valuations than they were just a couple weeks ago. #-ad_banner-#Of course, the devil’s in the details. Which stocks are truly bargains, and which are simply lower in price because they reflect some new reality — for example, China’s economy growing slower than expected? Whenever I’m confronted with that question, I think about what companies make sense to buy and hold for the long term: leaders in growing markets with established brands, protection from competition (either because… Read More

The S&P 500 lost 7.5% in the first eight trading days of the year, a dismal way to kick off the new year. At this rate, 2016 is sure to be the market’s worst year since 2008’s 36.6% loss. Or is it? #-ad_banner-#History tells us such predictions are folly. True, you’ll see plenty of articles implying the opposite. They’ll say this could be the worst January ever, and that the market is already doomed to a negative calendar year. There’s some validity to that prediction. Being several percentage points in the hole will make it difficult for the market to… Read More

The S&P 500 lost 7.5% in the first eight trading days of the year, a dismal way to kick off the new year. At this rate, 2016 is sure to be the market’s worst year since 2008’s 36.6% loss. Or is it? #-ad_banner-#History tells us such predictions are folly. True, you’ll see plenty of articles implying the opposite. They’ll say this could be the worst January ever, and that the market is already doomed to a negative calendar year. There’s some validity to that prediction. Being several percentage points in the hole will make it difficult for the market to rally enough to generate a strong positive return for the full year. After this 7.5% drop, the S&P 500 needs gain of 8.1% to get back to break-even for the year. But regardless of the market’s total return for the 2016 calendar year — an arbitrary time period for most investors — can we make any predictions about the future direction of the market after this poor beginning? Let’s look at the historical record. Since 1950, the S&P 500 has had a negative January 26 times. In the succeeding 12 months (February through the following January), the S&P 500 had… Read More