These days it seems as if the market doesn’t know whether it wants to break through fears of higher rates and a slowing China or crash lower into a new bear market. The VIX volatility index has jumped to an average 24.1 in the first month of 2016 against an average of just 16.7 in 2015. The S&P 500 tumbled 9% in the first three weeks and triple-digit moves in the Dow are a daily occurrence.  In the frenzy of daily trading, it’s easy to lose sight of the long-term potential to make money. When asset prices plunge, it’s easy… Read More

These days it seems as if the market doesn’t know whether it wants to break through fears of higher rates and a slowing China or crash lower into a new bear market. The VIX volatility index has jumped to an average 24.1 in the first month of 2016 against an average of just 16.7 in 2015. The S&P 500 tumbled 9% in the first three weeks and triple-digit moves in the Dow are a daily occurrence.  In the frenzy of daily trading, it’s easy to lose sight of the long-term potential to make money. When asset prices plunge, it’s easy to forget about the 221% total return on the S&P 500 since the bottom of the financial crisis in March 2009 or the 375% cumulative return over the last two decades. #-ad_banner-#In fact, the recent market selloff may be your opportunity to pick up some of the best performers of the last 20 years at a discount. A lot of these bellwether names saw their stock prices surge over the last few years but have come down to more reasonable values in the last month.  They’ve made millionaires of investors over the last two decades and may be ready to… 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

The S&P 500 broke 1860 last week, nearly 13% down from its 52-week high last May and into correction territory. With no bottom in sight for oil prices and question marks on global growth, fresh calls come out daily for an end to the seven-year bull market. If the market does fall 20% from its high to make the official mark for bear territory, it would be one of only seven other times it’s done so in the last 50 years according to Yardeni Research.  #-ad_banner-#If you believe the old maxim to buy when there’s blood in the… Read More

The S&P 500 broke 1860 last week, nearly 13% down from its 52-week high last May and into correction territory. With no bottom in sight for oil prices and question marks on global growth, fresh calls come out daily for an end to the seven-year bull market. If the market does fall 20% from its high to make the official mark for bear territory, it would be one of only seven other times it’s done so in the last 50 years according to Yardeni Research.  #-ad_banner-#If you believe the old maxim to buy when there’s blood in the streets, today could turn out to be a profitable entry point for investors. In four of those seven bear markets, stocks were up an average of 28% within a year and were up an average of 8% one year following all seven declines. But investors won’t have to wait for the S&P 500 to reach its bear inflection point to start finding bargains. I’ve found another market that is already down nearly 40% from its 52-week high — and some short-term catalysts could mean a rebound. Beyond the near-term upside, this market has strong long-term fundamentals to take it even… Read More

Investors are wondering when the pain is going to end. The S&P 500 has plummeted more than 10% since late December to trade at levels not seen since late 2014. That’s a full-blown correction in just over three weeks’ time.  It’s hard not to let your emotions get the best of you in a time like this, which is why many investors panic and rush for the exits, willing to sell at any price. They often end up regretting their rashness when stocks bounce back from oversold levels. Even if the market does not fully recover, chances are… Read More

Investors are wondering when the pain is going to end. The S&P 500 has plummeted more than 10% since late December to trade at levels not seen since late 2014. That’s a full-blown correction in just over three weeks’ time.  It’s hard not to let your emotions get the best of you in a time like this, which is why many investors panic and rush for the exits, willing to sell at any price. They often end up regretting their rashness when stocks bounce back from oversold levels. Even if the market does not fully recover, chances are they could have gotten out at a better price if they had kept a cooler head. Then there are the bottom fishers who view such selling as an opportunity. They start scavenging the wreckage for beaten-down names in hopes of scoring a great deal. #-ad_banner-# But this can be a precarious strategy, even in a solid market, which we are most certainly not in. Trends tend to persist, and trying to guess when and where a downtrend will stop can wind up being very costly. No doubt you’ve heard the phrase, “Never try to catch a… 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

Fourth quarter earnings season is here and expectations are for a decline of 5.3% for companies in the S&P 500 on a year-ago basis. This would mark the third consecutive quarter of lower earnings, the worst streak since the third quarter of 2009.  While materials and energy are feeling the most pain, analysts have downgraded their EPS estimates in nine of the ten sectors tracked by FactSet Research over the past three months. It’s not just earnings that are looking weak in this market. Revenue is on track to post its fourth consecutive quarterly decline with analysts expected a dip… Read More

Fourth quarter earnings season is here and expectations are for a decline of 5.3% for companies in the S&P 500 on a year-ago basis. This would mark the third consecutive quarter of lower earnings, the worst streak since the third quarter of 2009.  While materials and energy are feeling the most pain, analysts have downgraded their EPS estimates in nine of the ten sectors tracked by FactSet Research over the past three months. It’s not just earnings that are looking weak in this market. Revenue is on track to post its fourth consecutive quarterly decline with analysts expected a dip of 3.3% in sales compared to the same period last year. #-ad_banner-#It’s been a tough quarter for most companies and may get worse before it gets better.  But one company looks to buck the trend and could actually report stronger-than-expected earnings. This company has a history of beating expectations and operates within one of the few bright spots in the economy. The Only Stable Market Right Now Is The Job Market The U.S. employment picture has been one of the few bright spots in the economy, adding 292,000 jobs in December. In fact, jobless claims finished 2015 at the… 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

The stock market is off to one of its worst Januarys ever. That’s bad news for those of us with significant exposure to stocks. But in a sense, it’s good news for those of us looking to buy great companies at attractive valuations. This winter blizzard has buried many excellent stocks without regard for their individual fundamentals — creating bargains for investors with the fortitude to buy in the face of the storm. I’ve looked into the best stocks to own in a market downturn.  Some experts are pointing to the current selloff as a harbinger of a bear market. Read More

The stock market is off to one of its worst Januarys ever. That’s bad news for those of us with significant exposure to stocks. But in a sense, it’s good news for those of us looking to buy great companies at attractive valuations. This winter blizzard has buried many excellent stocks without regard for their individual fundamentals — creating bargains for investors with the fortitude to buy in the face of the storm. I’ve looked into the best stocks to own in a market downturn.  Some experts are pointing to the current selloff as a harbinger of a bear market. They say the U.S. economy is in its seventh year of recovery and overdue for a recession. China is imploding and the Federal Reserve blundered by raising short-term interest rates at the exact wrong time, they argue. So any seeming bargains in the stock market now are nothing but fool’s gold. #-ad_banner-#Or so they say. From my perspective, certain stocks are buy-and-hold candidates whenever they’re relatively cheap: large, financially strong companies with established brands and commanding shares in growing markets. Under normal circumstances, you can’t buy them at reasonable valuations because of their sterling qualities. But pessimism creates opportunity for… Read More

Talk about an inauspicious start to 2016. On the first trading day of the year, the Dow Jones Industrial Average closed 276 points lower after dropping by as much as 467 points. As I write this, the Dow has continued its slide. And it’s anybody’s guess how bad things might get. #-ad_banner-#The reason? Well, the initial selloff on Monday was widely attributed to the big sell-off in China overnight. But there are plenty of other causes for concern: low oil prices, the Fed, tensions between Saudi Arabia and Iran… I’ll continue to monitor national and international developments and their impact… Read More

Talk about an inauspicious start to 2016. On the first trading day of the year, the Dow Jones Industrial Average closed 276 points lower after dropping by as much as 467 points. As I write this, the Dow has continued its slide. And it’s anybody’s guess how bad things might get. #-ad_banner-#The reason? Well, the initial selloff on Monday was widely attributed to the big sell-off in China overnight. But there are plenty of other causes for concern: low oil prices, the Fed, tensions between Saudi Arabia and Iran… I’ll continue to monitor national and international developments and their impact on the markets, but bottom line, I don’t see any immediate causes for major concern here. Why? I’ve said it before, and I’ll say it again: It’s times like these when it’s great to own a “Forever” stock. The idea of Forever stocks is simple: as an investor, you want to buy great businesses that can be held for months, years, even decades, without worry. Stocks like these are the foundation of my premium newsletter, Top 10 Stocks. This idea may sound simple, but few investors actually follow it during good times, let alone periods of market volatility. Take a… Read More