With companies sporting abnormally high levels of cash these days, they’re feeling greater pressure to give something back to shareholders. A dividend hike is the normal route, but an increasing number of companies are initiating massive stock buybacks.     I looked… Read More

You can still practically smell the wreckage. Stocks of the nation’s largest banks, most of which were overexposed to toxic subprime assets, crashed and burned during the financial crisis. The KBW Bank Index (an index of the largest American banks) fell from a high… 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

We’re entering the back half of December, which is one of the slowest times of the year in terms of market trading volume. And lower volume means higher volatility, as just a few traders can move a stock sharply if there’s no one around for the counter trade. That means this is no time to be complacent — especially when a key stock market indicator is signaling potential trouble. The Relative Strength Index (RSI), which helps investors determine whether the market is undervalued or overvalued in the near-term, is sending a clear signal: the market… Read More

We’re entering the back half of December, which is one of the slowest times of the year in terms of market trading volume. And lower volume means higher volatility, as just a few traders can move a stock sharply if there’s no one around for the counter trade. That means this is no time to be complacent — especially when a key stock market indicator is signaling potential trouble. The Relative Strength Index (RSI), which helps investors determine whether the market is undervalued or overvalued in the near-term, is sending a clear signal: the market is sharply overbought. The RSI compares recent gains with recent losses, dividing the trading days with gains by trading days with losses, and also accounts for the magnitude of those moves. [See our definition  in InvestingAnswers.com for more] After an extended period of mostly losing sessions, the RSI will slump, sometime below 30, which is used by many as a clear buying signal (also known as when the market is “oversold”). And when the market is steadily rising, this index moves well higher, and investors generally become concerned that we’re… Read More

Investing in large companies with diversified revenue streams is a strategy that can let you sleep soundly at night. Most firms in the Dow Jones Industrial Average, an index of 30 of the largest and most dominant firms in the world, use size to their advantage. Read More

Just a little more than a decade ago, most investors wouldn’t put a dime in this emerging country, even if they were using someone else’s money. But plenty can change in a short amount of time, and today the story is vastly different. Now… Read More

One of the curious aspects of the recent rebound in the IPO market is the heavy slate of China-based companies in the mix. It remains pretty hard for U.S.-based companies to line up a deal, but investment bankers have had little trouble if the… Read More

The recent agreement in Washington to resolve the tax impasse has led many economists to re-check their assumptions about the economy in 2011. Their conclusion: the outlook for 2011 just got a little better. Let’s look at the specific economic indicators, and where most think they will be by… Read More

Any shareholder of a company that has been bought out can tell you that takeovers are often lucrative propositions, often delivering quick double-digit gains. But overall, acquisitions have a reputation for destroying shareholder value at the acquiring company. Studies place the failure rate at between 60% and… Read More

There is a whole range of ways to value a company, from its price-to-earnings (P/E) ratio to its Return on Equity (ROE). Yet investors should really be focused on free cash flow (… Read More