They say to never trust a skinny cook, the logic being that any chef who works in a kitchen all day and creates irresistible dishes probably can’t help but overindulge and pack on a few pounds. For much the same reason, I find it reassuring when a mutual fund manager invests their personal cash in his or her own fund. And I like it even better when CEOs and other top executives stash a sizable percentage of their net worth in their own company’s stock. Conventional wisdom says that it’s a bullish sign when a company invests in itself through… Read More

They say to never trust a skinny cook, the logic being that any chef who works in a kitchen all day and creates irresistible dishes probably can’t help but overindulge and pack on a few pounds. For much the same reason, I find it reassuring when a mutual fund manager invests their personal cash in his or her own fund. And I like it even better when CEOs and other top executives stash a sizable percentage of their net worth in their own company’s stock. Conventional wisdom says that it’s a bullish sign when a company invests in itself through stock buybacks. If that’s true (and in most cases it is), then what does it say when these same managers sink a few million dollars of their OWN money in the shares? After all, board members, directors, chairmen and other upper executives know the business and the industry better than anyone else. Who understands the inner workings of Apple (Nasdaq: AAPL) better than Tim Cook? Who has their finger on the pulse of online advertising quite like Google (Nasdaq: GOOG) boss Larry Page? These well-connected individuals also have access to privileged information that the rest of us don’t get to… Read More

This company has grown its dividend 11% a year since 2003. It’s also one of my favorite dividend stocks on the market today. In the uncertain world of investing, a regular stream of dividend payments is the closest thing investors have to a guaranteed return. We all buy common stocks in anticipation the shares will increase in value at some point, but dividend stocks can provide us with a steady paycheck while we wait for shares to increase in value. And while it’s hard to know what has “real” value in the stock market, dividends are undoubtedly real money. This… Read More

This company has grown its dividend 11% a year since 2003. It’s also one of my favorite dividend stocks on the market today. In the uncertain world of investing, a regular stream of dividend payments is the closest thing investors have to a guaranteed return. We all buy common stocks in anticipation the shares will increase in value at some point, but dividend stocks can provide us with a steady paycheck while we wait for shares to increase in value. And while it’s hard to know what has “real” value in the stock market, dividends are undoubtedly real money. This is why stocks that distribute reliable, recurring dividend payments year after year should form the core of an income investor’s portfolio. And I’ll show you exactly why… #-ad_banner-#Today, speculators often look to make a quick fortune on the next Microsoft — some fast-growing company operating in an exciting new industry. But it would be misguided to focus entirely on volatile, unproven industries or companies while overlooking the numerous benefits offered by well established dividend-paying companies. While the current 2% yield offered by the S&P 500 might seem trivial, it would be a huge mistake to dismiss dividends entirely. Read More

As a rule, most investors are utterly preoccupied with earnings.  That’s understandable, of course. At the end of the day, the goal of any business is to turn a profit. The problem comes when we focus on the bottom line to the exclusion of everything else.  At best, this offers an incomplete view of how a company is performing. At worst, it can mask underlying weakness.  In response to the last recession, businesses of all shapes and sizes streamlined their operations to cut costs and preserve cash. Many did an outstanding job of erasing red ink from the books. The… Read More

As a rule, most investors are utterly preoccupied with earnings.  That’s understandable, of course. At the end of the day, the goal of any business is to turn a profit. The problem comes when we focus on the bottom line to the exclusion of everything else.  At best, this offers an incomplete view of how a company is performing. At worst, it can mask underlying weakness.  In response to the last recession, businesses of all shapes and sizes streamlined their operations to cut costs and preserve cash. Many did an outstanding job of erasing red ink from the books. The deeper they slashed, the more money they pocketed.  At first, this delighted investors. They saw growing earnings each quarter and cheered. But eventually, they began to realize that the phantom “growth” was nothing more than belt-tightening. In many cases, revenues were actually flat or sometimes even falling.  You can boost your household disposable income by eliminating the $100 weekly maid service and the $100 weekly lawn care service — but you’d much rather get a $200 weekly pay raise.  #-ad_banner-#The same rings true in the business world, where you’d much rather attract new customers or increase prices. There’s a limit… Read More

If lending money to the government for years is one of the worst things you can do, then this strategy is the smartest. The 30-year U.S. Treasury Bond is quite possibly the worst investment option out there right now. Even your Uncle Dave’s coin and baseball card collection might offer better long-term returns. Let’s forget for a moment about the Fed’s intention to taper quantitative easing, which has already begun to place upward pressure on interest rates (and thus downward pressure on bond prices). And let’s forget that the longer a bond’s duration, the greater its sensitivity to interest rate… Read More

If lending money to the government for years is one of the worst things you can do, then this strategy is the smartest. The 30-year U.S. Treasury Bond is quite possibly the worst investment option out there right now. Even your Uncle Dave’s coin and baseball card collection might offer better long-term returns. Let’s forget for a moment about the Fed’s intention to taper quantitative easing, which has already begun to place upward pressure on interest rates (and thus downward pressure on bond prices). And let’s forget that the longer a bond’s duration, the greater its sensitivity to interest rate movements. So with every basis point uptick, nothing will feel the pain more acutely than the 30-year “long bond.” #-ad_banner-#Let’s even forget that Uncle Sam’s credit rating has already been downgraded by at least one ratings agency.  Even if interest rates don’t rise and Congress miraculously balances the budget — a best-case scenario — you’re still tying up your capital for the next three decades at a paltry rate of around 3.5%. But here’s the kicker: when your principal is finally repaid in the distant future, those dollars will have lost much of their purchasing power. Just ask anyone who… Read More

If you were asked what the scarcest commodity on the planet was, I am sure many of you would say gold or oil. But it’s neither of these, nor is it platinum or copper or one of the rare earth metals.  And I know many people will say fresh water,… Read More

They are a rarity on the market today. Most of the headlines over the summer have been about how the stock market is nearing all-time highs… making it difficult for investors to find a good entry point… Read More

We get a lot of emails here at StreetAuthority… and we read every single one of them. We don’t have time to respond to all of them, but we try. Recently we started getting a rather persistent email from a subscriber to my High-Yield Investing newsletter. Here’s what the subscriber wrote: “The newsletter is called ‘High-Yield Investing!’ Stocks with 4% yields do not constitute high yield. Maybe ‘Conservative-Yield’ would be a more appropriate title. I am deeply disappointed… High Yields… Read More

We get a lot of emails here at StreetAuthority… and we read every single one of them. We don’t have time to respond to all of them, but we try. Recently we started getting a rather persistent email from a subscriber to my High-Yield Investing newsletter. Here’s what the subscriber wrote: “The newsletter is called ‘High-Yield Investing!’ Stocks with 4% yields do not constitute high yield. Maybe ‘Conservative-Yield’ would be a more appropriate title. I am deeply disappointed… High Yields [start] at 9% minimum.” — H.W. I appreciate the feedback from H.W., but the truth is, I think he may not be paying attention to what’s going in the market today. My short answer to H.W.: It’s not 1980 or 2009. But here is my long answer… I would love to be able to showcase high-quality, low-risk stocks and bonds with robust yields of 9% or better to my High-Yield Investing readers week in and week out. If I did, I would likely be writing to you… Read More

I remember when the housing bubble burst back in 2007. Most people thought it would never make a comeback. Some went so far as to predict it would take America 50 years or more for the housing sector to climb back to pre-recession levels. Well, just a short five years later, I am pleased to say that housing is back. #-ad_banner-#The latest housing data from the Commerce Department from July shows that new home purchases are up 6.8% and median home prices gained 8.3% since a year ago. Read More

I remember when the housing bubble burst back in 2007. Most people thought it would never make a comeback. Some went so far as to predict it would take America 50 years or more for the housing sector to climb back to pre-recession levels. Well, just a short five years later, I am pleased to say that housing is back. #-ad_banner-#The latest housing data from the Commerce Department from July shows that new home purchases are up 6.8% and median home prices gained 8.3% since a year ago. And a survey by Standard & Poor’s found that housing in 20 of the largest U.S. cities — from Boston to Los Angeles — posted gains in June. After going through what was the housing market‘s darkest hour, housing is now one of the most popular investments in America. But that’s only half the story. There’s a much larger force in play behind the uptrend in the housing market. And it’s not what you’d expect. Read More

Americans are being betrayed by their own government. Never in our 237 years as a country have 12 faceless bureaucrats had so much control over our wealth. You see, these bureaucrats, along with their leader — in the blink of an eye — could soon be responsible for one of the worst market crashes in history. #-ad_banner-#I’ll explain more about that in a minute. But first, you should know that when this crucial event takes place, you’ll want to have your portfolio ready to ride it out…… Read More

Americans are being betrayed by their own government. Never in our 237 years as a country have 12 faceless bureaucrats had so much control over our wealth. You see, these bureaucrats, along with their leader — in the blink of an eye — could soon be responsible for one of the worst market crashes in history. #-ad_banner-#I’ll explain more about that in a minute. But first, you should know that when this crucial event takes place, you’ll want to have your portfolio ready to ride it out… and potentially profit tremendously. So what market do I think is about to take one of the biggest hits in a century?  The bond market. And this won’t be an isolated incidence — every investor will be affected.  When Federal Reserve Chairman Ben Bernanke and the 12 voting members of the Federal Reserve Board meet in late October, there is a very real possibility they’ll vote to taper the $85-billion-a-month bond-buying program, or… Read More

It’s easy for articles about the shale boom to get lost in the shuffle. After being flooded with articles (each more optimistic than the last), it’s no wonder some investors have started to become desensitized to any oil-related news. After all, we’ve already learned that the U.S. Read More