The upcoming November election is shaping up to be an important and entertaining event. Investors are paying close attention, concerned about the impact the new president might have on the economy. But I believe no matter who wins in November, the incoming president will have limited impact on the economy and the stock market (at least at first). As we’ve seen in the past, presidential decisions can create confidence that leads to a bull market, or they can lead to a sense of malaise and a bear market. But it takes time for sentiment to develop and… Read More

The upcoming November election is shaping up to be an important and entertaining event. Investors are paying close attention, concerned about the impact the new president might have on the economy. But I believe no matter who wins in November, the incoming president will have limited impact on the economy and the stock market (at least at first). As we’ve seen in the past, presidential decisions can create confidence that leads to a bull market, or they can lead to a sense of malaise and a bear market. But it takes time for sentiment to develop and influence the market. The market can ignore the president for a time as traders find other things to focus on, like earnings or economic growth. #-ad_banner-#Right now, the economy is just too big to turn suddenly, and industries are too highly regulated for a new president to simply step in and make sweeping changes. After the election the new president will need time to enact policies, and it will take even more time before they really kick in. Overall, we probably have a year or more after the election to evaluate whether the president… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or only buying and holding investments altogether. That’s how powerful this strategy is: It can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike. #-ad_banner-#The technique involves selling options. If you’ve never tried your hand at options before, don’t worry — the kind of options strategy I’m talking about is… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or only buying and holding investments altogether. That’s how powerful this strategy is: It can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike. #-ad_banner-#The technique involves selling options. If you’ve never tried your hand at options before, don’t worry — the kind of options strategy I’m talking about is perhaps the safest, easiest way to execute a trade for income that you’ll ever come across. Specifically, I’m referring to selling call options. A call option gives the buyer the right — but not the obligation — to buy a stock from the call seller if it’s trading above a specified price before a specified date. When you sell a call option, you accept the potential obligation to sell a particular stock at a specified price at a set time in the future. When you sell a call, you generate what… Read More

Investors have a tendency to fixate on the negative instead of seeing the bigger bullish picture. Because of this, they often overreact to the slightest bad news and rush for the exits.  For the more level-headed traders out there, this can lead to great opportunities. #-ad_banner-# Gilead Sciences (Nasdaq: GILD) is a prime example of this. Due in part to investor overreactions, this biopharmaceutical company may be one of the most undervalued stocks in its sector. Gilead offers consistent earnings growth, and analysts… Read More

Investors have a tendency to fixate on the negative instead of seeing the bigger bullish picture. Because of this, they often overreact to the slightest bad news and rush for the exits.  For the more level-headed traders out there, this can lead to great opportunities. #-ad_banner-# Gilead Sciences (Nasdaq: GILD) is a prime example of this. Due in part to investor overreactions, this biopharmaceutical company may be one of the most undervalued stocks in its sector. Gilead offers consistent earnings growth, and analysts expect it to earn $12.08 per share this year and $12.42 per share next year. With shares trading at $82.70, GILD has a forward price-to-earnings (P/E) ratio of less than 7, which is a bargain considering that the average forward valuation in the biotech industry is 25. Other large drug companies with stable earnings — like Merck (NYSE: MRK) and Pfizer (NYSE: PFE) — often trade with forward multiples above the industry average. If GILD were valued at just half the industry average (which I believe is a fair assumption), shares would trade around $150 — more than 80% above… Read More

Pension funds are in the news again… and the news isn’t very good. Many plans are underfunded, which means they don’t have enough money to pay the benefits they’ve promised. Among those many underfunded plans are funds managed by the city of Chicago, which were recently blocked… Read More

#-ad_banner-#As some of you may know, I use technical analysis extensively, incorporating it into my trading strategy along with fundamental and quantitative analysis.  In simple terms, technical analysis requires a study of the past, as market patterns tend to repeat over time. Beyond that, though, technical analysis can vary; some analysts use charts, some use indicators and computer testing, and some rely on history books. I think all three techniques are important to consider.  Chart patterns do tend to repeat over time. While it is possible to take this idea too far (which many people do), we can often spot… Read More

#-ad_banner-#As some of you may know, I use technical analysis extensively, incorporating it into my trading strategy along with fundamental and quantitative analysis.  In simple terms, technical analysis requires a study of the past, as market patterns tend to repeat over time. Beyond that, though, technical analysis can vary; some analysts use charts, some use indicators and computer testing, and some rely on history books. I think all three techniques are important to consider.  Chart patterns do tend to repeat over time. While it is possible to take this idea too far (which many people do), we can often spot broad patterns on charts that help us identify major trends. For example, the chart below highlights bullish double-bottom patterns (blue boxes) that developed in the S&P 500 over the past year. But it’s also important to remember that no pattern will ever work 100% of the time, as this chart illustrates. In the red box, you’ll see a double-bottom pattern that didn’t work.  And that’s where indicators and computer testing come in: They quantify how effective different indicators actually are.  There are hundreds, if not thousands, of technical indicators. I have tested many of them and found almost… Read More

One of the best income strategies in the world involves a market most investors completely ignore. We call it the Retirement Income Cash-Haul — or RICH — System. Put simply, it’s an award-winning, 10-minute-a-week income system that can give you $386 or more every week from the best companies in the world — without touching stocks. #-ad_banner-#I’ve been recommending trades using this system for three years now. And so far, the results have been astounding. I’ve closed 124 trades and each and every one has been a winner. On average, the RICH System has… Read More

One of the best income strategies in the world involves a market most investors completely ignore. We call it the Retirement Income Cash-Haul — or RICH — System. Put simply, it’s an award-winning, 10-minute-a-week income system that can give you $386 or more every week from the best companies in the world — without touching stocks. #-ad_banner-#I’ve been recommending trades using this system for three years now. And so far, the results have been astounding. I’ve closed 124 trades and each and every one has been a winner. On average, the RICH System has delivered annualized returns of 48% per trade. This approach is different. We don’t buy and hold… we don’t day trade… and we don’t invest in things like index or mutual funds.br /> In fact, we typically don’t buy or sell stocks at all. Instead, this approach allows you to collect a payment upfront… and make money even if a stock remains flat or drops as much as 10%-15%. I’ve received hundreds of emails and letters from thankful investors like these:       “I’m generating about $1,000 a month for… Read More

It’s one of the most frustrating things an investor can experience: Thanks to some supposed global calamity in the making, the stock market enters a period of insane volatility. Each tiny bit of news is parsed by the financial media, and then the major indices swing wildly — sometimes even in direct conflict with the “goodness” or “badness” of the news itself.  After a few months of this — and more than a few sleepless nights — you check your computer screen to find the stocks in your portfolio are right back where they were before. #-ad_banner-#It’s times like this… Read More

It’s one of the most frustrating things an investor can experience: Thanks to some supposed global calamity in the making, the stock market enters a period of insane volatility. Each tiny bit of news is parsed by the financial media, and then the major indices swing wildly — sometimes even in direct conflict with the “goodness” or “badness” of the news itself.  After a few months of this — and more than a few sleepless nights — you check your computer screen to find the stocks in your portfolio are right back where they were before. #-ad_banner-#It’s times like this that can lead an investor to ask:  “Is all of this worry even worth it?” If you can identify with that feeling, then believe me when I tell you I understand. We’ve all been there. But what if I told you that you didn’t have to settle for this? It just so happens that these times of great market volatility are prime-time for one of the safest, most reliable ways around to earn extra income. And what’s more, you don’t even necessarily have to be “right” about the stocks you pick… I personally can’t think of a better strategy for… Read More

I took my son to preschool the other day and, for the first time, he ran off without saying goodbye to me — he just saw his friend and off he went. I walked back to my car wishing I could turn the clock back to a time when my son didn’t want to play with anyone but me. As you probably guessed, this does have something to do with investing. In behavioral finance terms, I was anchoring my expectations to a time that seemed better. In reality, kids grow up and become less dependent on their parents. Change is… Read More

I took my son to preschool the other day and, for the first time, he ran off without saying goodbye to me — he just saw his friend and off he went. I walked back to my car wishing I could turn the clock back to a time when my son didn’t want to play with anyone but me. As you probably guessed, this does have something to do with investing. In behavioral finance terms, I was anchoring my expectations to a time that seemed better. In reality, kids grow up and become less dependent on their parents. Change is inevitable, and I need to accept that. That last sentence also applies to stocks. The companies we invest in will change over time, and we will either accept those changes (the healthy thing to do with both kids and stocks) or fight them. #-ad_banner-# Anchoring can be a costly mistake. Investors often look backward instead of forward. They may see a stock they like drop from $50 to $25 and argue it’s extremely undervalued at $25 since it was a “good” stock at $50. They have anchored expectations to what they believed when the stock was… Read More

Large swings in the Dow Jones Industrial Average and other major market averages always seem to increase the level of fear in business news headlines. Here are some good ones we’ve seen in the past: “Panic selling returns to fragile markets” “Investors urged to avoid panic moves as markets plunge” “Chart shows the peak of U.S. investor panic today” #-ad_banner-#I don’t think these headlines truly reflect the attitude of most individual investors. Personally, I believe recent experience has taught many individual investors to take market pullbacks in stride. We’ve gone through two major bear markets in a little more than… Read More

Large swings in the Dow Jones Industrial Average and other major market averages always seem to increase the level of fear in business news headlines. Here are some good ones we’ve seen in the past: “Panic selling returns to fragile markets” “Investors urged to avoid panic moves as markets plunge” “Chart shows the peak of U.S. investor panic today” #-ad_banner-#I don’t think these headlines truly reflect the attitude of most individual investors. Personally, I believe recent experience has taught many individual investors to take market pullbacks in stride. We’ve gone through two major bear markets in a little more than 15 years, and both times the markets have recovered. In the middle of the last major recession, Warren Buffett — one of the world’s greatest investors — wrote an op-ed for The New York Times explaining why he was still buying stocks. It wasn’t because he thought the market had bottomed. In fact, he clearly stated that timing a bottom was not his intent (which was a good thing because he missed the mark by a number of months). Instead, Buffett was still buying stocks because they do well in the long term, even in the face of daunting headlines. Read More

There seem to be two kinds of investors right now: those who believe the next bear market is here and ready to destroy trillions of dollars in wealth, and those who proclaim every up day in the market is the end of the pullback.  #-ad_banner-#This is largely the fault of the financial media, with bombastic bloviators shouting over each other on television and giving the impression that action is required right now. If you don’t stay glued to the TV you might miss the start of the next bull market or get mauled by the bear! Really, nothing could be… Read More

There seem to be two kinds of investors right now: those who believe the next bear market is here and ready to destroy trillions of dollars in wealth, and those who proclaim every up day in the market is the end of the pullback.  #-ad_banner-#This is largely the fault of the financial media, with bombastic bloviators shouting over each other on television and giving the impression that action is required right now. If you don’t stay glued to the TV you might miss the start of the next bull market or get mauled by the bear! Really, nothing could be further from the truth. The argument that we are experiencing a pullback during a long-term bull market is difficult to make. I believe the bull market quietly died of old age sometime in the past year.  As we see on the chart below, stocks moved steadily higher from their bottom in March 2009 through July 2015, a six-year run. But the market has made little progress since the end of 2014. It has formed what looks to be an extended topping pattern and trended down since summer. Still, this doesn’t mean you need to panic.  According to a… Read More