After falling for six straight months, oil prices are still in search of a bottom. A greater than 50% plunge over the past year is the second-largest annual decline on record.   Sector share prices have followed suit. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP), for example, is down more than 40% from its 52-week high.   Considering previously planned production increases are still boosting the supply of oil, investors are left to wonder when the bleeding will stop. Read More

  After falling for six straight months, oil prices are still in search of a bottom. A greater than 50% plunge over the past year is the second-largest annual decline on record.   Sector share prices have followed suit. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP), for example, is down more than 40% from its 52-week high.   Considering previously planned production increases are still boosting the supply of oil, investors are left to wonder when the bleeding will stop.     The sell-off has been especially pronounced over the past two months, leading to a huge spike in volatility. The OVX index, a measure of West Texas Intermediate Crude’s (WTI) implied volatility, has spiked sharply and is now at its highest level since 2012 despite relative calm in the VIX volatility gauge for equities.     And with more oil supply coming in the near-term (thanks to nearly $300 billion in energy exploration spending in the U.S. alone last year), few expect a quick rebound in prices or a drop in volatility. The tug-of-war… Read More

  It was a tricky year for social media stocks. The top players continued to generate robust growth in user statistics. Yet  many social media platforms have yet to translate traffic to real monetization and revenue growth.   Facebook, Inc. (Nasdaq: FB) is the obvious exception. The company delivered a range of solid growth metrics, and its shares have risen  more than four-fold from 2012 lows.   The rest of the group hasn’t kept pace.  Shares of Yelp Inc. (NYSE: YELP) were down roughly 20% last year and professional platform LinkedIn Corp. (NYSE: LNKD), which continues to cement its industry… Read More

  It was a tricky year for social media stocks. The top players continued to generate robust growth in user statistics. Yet  many social media platforms have yet to translate traffic to real monetization and revenue growth.   Facebook, Inc. (Nasdaq: FB) is the obvious exception. The company delivered a range of solid growth metrics, and its shares have risen  more than four-fold from 2012 lows.   The rest of the group hasn’t kept pace.  Shares of Yelp Inc. (NYSE: YELP) were down roughly 20% last year and professional platform LinkedIn Corp. (NYSE: LNKD), which continues to cement its industry leadership, was only able to squeak out a 7% gain.   In a moment, I’ll mention my favorite social media stock for the year ahead, even though its shares sank more than 40% in 2014.   Social Media: Growth Without Monetization Is Meaningless It’s important to remember that Facebook was a dud with investors — until it took off like a rocket.   The company went public in May 2012, opening to the biggest media hype in years before plunging 53% by year’s end. Huge growth and scale potential drew investors into the IPO, but shares tanked when growth started… Read More

For years, the stock market mantra has been, “Don’t fight the Fed.” Despite slow global growth, multiple geopolitical incidents and a struggling U.S. economy, the historic monetary program enacted by the Federal Reserve has driven stock prices higher.  #-ad_banner-#While U.S. stocks are not particularly expensive compared to prior bubbles, the Fed wrapped up its bond-buying program and is ready to start hiking interest rates sometime in 2015.  Even against the potential for stronger economic growth on lower energy prices, I can’t help but wonder if the mantra is now warning investors of risks in U.S. stocks. If monetary… Read More

For years, the stock market mantra has been, “Don’t fight the Fed.” Despite slow global growth, multiple geopolitical incidents and a struggling U.S. economy, the historic monetary program enacted by the Federal Reserve has driven stock prices higher.  #-ad_banner-#While U.S. stocks are not particularly expensive compared to prior bubbles, the Fed wrapped up its bond-buying program and is ready to start hiking interest rates sometime in 2015.  Even against the potential for stronger economic growth on lower energy prices, I can’t help but wonder if the mantra is now warning investors of risks in U.S. stocks. If monetary stimulus can send markets higher even against weak economic data, will a restrictive monetary policy send shares lower even during good economic times? Fortunately, there is a market that should see strong gains in 2015 even as the Fed is taking the punch bowl away.   It’s not Japan where the Bank of Japan has engineered its own stock market rally with an aggressive monetary program. The Nikkei 225 jumped 63% in the past two years, but Prime Minister Shinzo Abe is having a tough time launching the final arrow of his reform program, and record spending has yet to… Read More

Social media stocks are still a tough call for investors. Growth in the space is much stronger than offline advertising media, but investors have been largely disappointed by monetization. Even powerhouse Facebook (NASDAQ: FB) saw shares plunge more than 50% from its IPO in 2012 when enthusiasm waned… Read More

Lost in all the headlines about the oil’s price plunge was an ominous comment by the energy minister of the United Arab Emirates earlier this month. Just weeks after OPEC shocked global energy markets by refusing to support crude prices with a supply cut, statements by decision makers seem to point to an oil price war.   #-ad_banner-#Oil prices have collapsed more than 40% since September. While unprofitable production will eventually need to be cut to support prices, record capital spending over the last couple of years will keep fields producing well into 2015.   The U.S. energy… Read More

Lost in all the headlines about the oil’s price plunge was an ominous comment by the energy minister of the United Arab Emirates earlier this month. Just weeks after OPEC shocked global energy markets by refusing to support crude prices with a supply cut, statements by decision makers seem to point to an oil price war.   #-ad_banner-#Oil prices have collapsed more than 40% since September. While unprofitable production will eventually need to be cut to support prices, record capital spending over the last couple of years will keep fields producing well into 2015.   The U.S. energy revolution will still be a strong investment theme over the longer-term, but can your portfolio survive several years of price wars?   Oil Prices: How Low And For How Long? Suhail Al-Mazrouei, UAE Energy Minister, said OPEC would be comfortable with crude prices as low as $40, which was followed by a nearly 5% price plunge in West Texas Intermediate — a benchmark for oil.   The statement was a shot across the bow of world oil production and a full commitment to protect market share against surging North American production.   The twelve members of OPEC produce 40% of… Read More

     Financial planners routinely advise clients to plan for a retirement nest egg that can be drawn down at a 4% annual rate.   #-ad_banner-#Ongoing investment gains in the retirement portfolio, coupled with that 4% drawdown, is often expected to be sufficient to meet income needs without running the risk of rapidly depleting your portfolio.   The problem: you need a portfolio valued at well over a million dollars to meet most budgets.   With two market crashes since 2000, most portfolios have fallen well short of such a lofty goal. And  withdrawing a higher percentage every year in… Read More

     Financial planners routinely advise clients to plan for a retirement nest egg that can be drawn down at a 4% annual rate.   #-ad_banner-#Ongoing investment gains in the retirement portfolio, coupled with that 4% drawdown, is often expected to be sufficient to meet income needs without running the risk of rapidly depleting your portfolio.   The problem: you need a portfolio valued at well over a million dollars to meet most budgets.   With two market crashes since 2000, most portfolios have fallen well short of such a lofty goal. And  withdrawing a higher percentage every year in retirement risks depleting your nest egg too soon, which can lead to financial ruin.   There is a better way to plan for retirement, a way that does not rely on arbitrary investing rules.   To Trust Or Not To Trust The 4% Rule? Fidelity Investments recently found that investors heading into retirement, people age 55 to 64 with both a 401K and an IRA, had a combined average balance of $261,400. Those with only a 401K had a balance of just $165,200. Using the 4% rule means living on less than $10,500 a year or about $871 per month in… Read More

The cyber attack on Sony Pictures has morphed into an international thriller to rival any Hollywood spy movie. New information is still leaking out on a daily basis, and this story could translate to even bigger growth for one industry. #-ad_banner-#Sources within Sony (NYSE: SNE) reported in late… Read More

Thanks to major changes in regulation, social media and technology, the business of banking has undergone radical change since the Great Recession of 2008.  And one key area of change has been in the field of lending. Skittish loan officers and costly new banking regulations have limited growth in consumer lending since the end of the recession.  These factors created an opening for an entirely new breed of banker: Every day consumers, many of whom have cash to lend out to peers.  Loan originations on peer lending platforms have been growing at an annualized rate of 100% or… Read More

Thanks to major changes in regulation, social media and technology, the business of banking has undergone radical change since the Great Recession of 2008.  And one key area of change has been in the field of lending. Skittish loan officers and costly new banking regulations have limited growth in consumer lending since the end of the recession.  These factors created an opening for an entirely new breed of banker: Every day consumers, many of whom have cash to lend out to peers.  Loan originations on peer lending platforms have been growing at an annualized rate of 100% or more since 2012. Compare this with an annual growth of 4% or less in traditional consumer credit at depository banks and you begin to see where lending is going in America. The idea of peer lending could not be simpler. You have actually been doing it — on an indirect basis — for quite some time. Banks use your deposits into checking and saving accounts as a source of funding for fresh loans. The peer lending platforms cut out the middleman and enable consumers to make direct loans to borrowers.  This finance niche has clearly arrived in the… Read More

The stock market is heading into its sixth year of this bull run, and investors are getting increasingly skittish with each sell-off. With the threat of higher interest rates in 2015, investors may be in for a rough ride. If you haven’t started thinking about diversifying your portfolio away from stocks, now would be a good time.  But cash and fixed-income are earning next to nothing, and many of the “safe” asset classes carry interest rate risks. Fortunately, there is an alternative investment class that can help diversify your portfolio and should continue to benefit from a stronger… Read More

The stock market is heading into its sixth year of this bull run, and investors are getting increasingly skittish with each sell-off. With the threat of higher interest rates in 2015, investors may be in for a rough ride. If you haven’t started thinking about diversifying your portfolio away from stocks, now would be a good time.  But cash and fixed-income are earning next to nothing, and many of the “safe” asset classes carry interest rate risks. Fortunately, there is an alternative investment class that can help diversify your portfolio and should continue to benefit from a stronger economy and higher rates. Diversify With BDCs Business development corporations (BDCs) are special finance companies that invest and lend money to small- and medium-sized companies much the same way that a private equity firm operates. Strategies are pretty diverse from providing capital for buyouts and restructuring to lending money on a short-term basis for projects and securitization. #-ad_banner-# BDCs are a good diversifier for a portfolio of shares in regular corporations because of their diversified financial investments. The UBS ETRACS Wells Fargo Business… Read More

Investors have been warming up to bank stocks in a big way.  The KBW Bank Index jumped 50% over the past two years, and a brightening economy suggests further good times ahead for the industry.                                                        Yet looks are deceiving. A series of regulatory changes actually portend tougher days ahead.   Wells Fargo & Co. (NYSE: WFC), which has been repeatedly cited by Warren Buffett as America’s best-run bank, should buck the head-winds. Frankly, it’s the only bank stock you should have in your portfolio right now.   Still Tweaking The Regulations Dodd-Frank regulation is… Read More

Investors have been warming up to bank stocks in a big way.  The KBW Bank Index jumped 50% over the past two years, and a brightening economy suggests further good times ahead for the industry.                                                        Yet looks are deceiving. A series of regulatory changes actually portend tougher days ahead.   Wells Fargo & Co. (NYSE: WFC), which has been repeatedly cited by Warren Buffett as America’s best-run bank, should buck the head-winds. Frankly, it’s the only bank stock you should have in your portfolio right now.   Still Tweaking The Regulations Dodd-Frank regulation is the most comprehensive reform of the banking industry since the Great Depression. It’s so detailed that only 220 of the 398 required rules have been finalized.   The move away from institutional credit ratings for risk-based capital will mean larger due diligence departments for  banks of all sizes. One local bank surveyed by the Washington Post reported a seven-fold increase in its compliance team. Mergers between smaller banks are increasing to better handle the regulatory burden. And in the quarters ahead, the  regulatory burden will only grow greater.   On top of existing regulations put in place… Read More