Income Investing

Precious metals are skyrocketing. An ounce of gold, selling for less than $300 a decade ago, now changes hands at more than $1,400. Investors of all types are worried that the Federal Reserve is putting us on the road to currency devaluation and soaring… Read More

It’s been a roller-coaster year for stocks, but one that will ultimately end well. Barring any unforeseen events, the S&P 500 will end the year with a gain of about 15.0%. This year brought with it a myriad of opportunities for profits and losses, from the commodities boom and M&A… Read More

This is the time of year when investors typically rebalance their portfolios and begin preparing for the year ahead. In preparation for the coming year, it helps to look back and think about the lessons learned from the previous year and how they can be applied for a profitable future. With that in mind, we asked some of StreetAuthority’s top experts what they learned in 2010 and how they hope to apply it in 2011. Here’s what they learned…  ———————————— Here’s what I learned this year: “It’s the economy, stupid.”… Read More

This is the time of year when investors typically rebalance their portfolios and begin preparing for the year ahead. In preparation for the coming year, it helps to look back and think about the lessons learned from the previous year and how they can be applied for a profitable future. With that in mind, we asked some of StreetAuthority’s top experts what they learned in 2010 and how they hope to apply it in 2011. Here’s what they learned…  ———————————— Here’s what I learned this year: “It’s the economy, stupid.” The market isn’t going to charge ahead no matter how good earnings look or how optimistic the Street may be when so many people remain out of work. Uncertainty over the tax code and health care hasn’t helped. But it’s one thing for the market to sputter or stall, it’s another thing entirely for such conditions to keep the best companies down. So while the S&P 500 didn’t blow up anyone’s skirt, there were plenty of big winners in 2010, despite the tough business climate. Cutting-edge technologies and products will always create value, and those companies’ shareholders will be… Read More

[This is a continuation of “10 Bold Predictions for 2011: Part 1”] 6. Individual investors finally start to re-enter U.S. equities in a major way in 2011 as the need to build savings in the face of looming retirements becomes a major consumer concern, and rising savings levels… Read More

As an income investor, I occasionally feel forced to choose between growth and a hefty dividend. Finding a high yielding stock that also has good growth potential is a rarity. One reason for that may be that fast-growing companies often don’t pay a dividend. Instead, these companies re-invest… Read More

It’s the most frequent question readers have asked me lately. Is there a buying opportunity thanks to the sell-off in municipal bonds and muni bond funds? Municipal bonds are issued by states and municipalities to fund public works. Generally they are considered safe, but in November many muni funds saw their biggest one-day price drop since the financial crisis. Investors withdrew a record $5.4 billion from municipal bond funds within two weeks last month, according to Lipper FMI. Some funds fell by 5% or more, and… Read More

It’s the most frequent question readers have asked me lately. Is there a buying opportunity thanks to the sell-off in municipal bonds and muni bond funds? Municipal bonds are issued by states and municipalities to fund public works. Generally they are considered safe, but in November many muni funds saw their biggest one-day price drop since the financial crisis. Investors withdrew a record $5.4 billion from municipal bond funds within two weeks last month, according to Lipper FMI. Some funds fell by 5% or more, and many hit 52-week lows. So what exactly is going on, and more importantly, is this a chance to buy municipal bond funds for cheap and lock in attractive yields on some of the safest securities available? Believe it or not, this sell-off wasn’t entirely unexpected. The pattern of a sell-off at year-end and a rebound in January is well-documented. It occurs when some investors sell before the end of the year to lock in their gains or losses for tax purposes. Then, they buy back the same shares in January. Read More

Like most investors, I’m usually looking for the safest and most attractive income streams. I search for stocks offering the highest yields, most reliable income and best opportunities for dividend growth. But there is a flip side to this bright picture. Some stocks look like safe income plays on the surface, but are really ticking time bombs. These stocks pay out more in dividends than they earn. Eventually, funds run out and they are forced to cut the dividend. For this reason, every income investor should know the warning signs of a… Read More

Like most investors, I’m usually looking for the safest and most attractive income streams. I search for stocks offering the highest yields, most reliable income and best opportunities for dividend growth. But there is a flip side to this bright picture. Some stocks look like safe income plays on the surface, but are really ticking time bombs. These stocks pay out more in dividends than they earn. Eventually, funds run out and they are forced to cut the dividend. For this reason, every income investor should know the warning signs of a stock in danger of a dividend cut. The most obvious sign is a dividend payout at or near 100% of earnings. That means every penny the company makes is supporting the dividend — nothing is left over to re-invest in the business or pay back loans. There are other danger signs to watch out for as well. Earnings power is key. If a company can’t grow earnings, odds are that dividend growth will stall as well. Companies with large amounts of debt are especially risky, since… Read More

We just endured a recession that was the worst since the Great Depression. Since the recession ended, the economic recovery has been weak to say the least. Forecasts for economic growth in 2011 and 2012 are hardly awe inspiring. While anything can happen and the stock… Read More