Share to Twitter Share to Linkedin I remain a big fan of cash right now. I know, I know. I’m not supposed to say this in a stock -focused column like this. “But Brett,” I can hear the rebuttal. “We’ve been smartly selling the rips . My cash is burning a hole in my pocket.” “And I’m here for the income. Shouldn’t I buy something ?” Not yet. We contrarians shouldn’t be in a hurry to time the bottom of the market. There will be free and fast money on the other side of this bearish storm. Every correction eventually ends. For now, we buy lightly. And enjoy our comfortable seat. This is what I call the “no beta” portfolio. It’s a pile of cash that we deploy when we “back up the truck” at major market bottoms. In the spring of 2020 , we went on a dividend shopping spree. We bought stocks like energy toll bridge ONE ONE ONEO NEO OK (OKE) for a song—and we’re now sitting on 148% gains. Later that year, we identified … [Read more...] about The Best Dividend Stocks, Bull Or Bear
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Share to Twitter Share to Linkedin 2022 has been a brutal year for investors. Presently, the S&P 500 is down over 16% Year-To-Date (YTD), the Dow is down 12% YTD, the NASDAQ is down an astounding 25% and the Russell 2000 small capitalization index is down 19%. The devastation has been widespread, with a high number of stocks down over 50%. Due to this, the Nasdaq Composite, S&P 500 Growth (SPYG) and Russell 2000 (All and Growth) segments of the market have confirmed their bear market status. The O’Neil methodology tends to use -25% from highs as the threshold for a bear market. Taking the commonly used -20% from highs, the S&P 500 and Russell 2000 Value have also reached the threshold. Only S&P 500 Value and Dow Industrials have not. In our January 28, 2022 Forbes article, we noted that after two consecutive failed Follow-Through Days (FTDs)*, triggered by an undercut of prior established lows, historically (using the S&P 500 since … [Read more...] about Bear Markets & Market Bottoms
Share to Twitter Share to Linkedin With inflation on the loose, we’ve turned to experts for four strategies to help you beat rising prices, at least in your portfolio. As it turns out, you don’t need to abandon stocks to hedge against inflation entirely. Instead, you can just shift some funds from the sectors you hold now over to the ones that are likely to benefit from an inflationary environment. 1. Stocks in Companies Providing Basic Supplies One area to shelter your portfolio from inflation is in companies providing basic supplies. They’re always in demand, which makes it possible for suppliers to raise prices in step with inflation. “Inflation is at near-term historic highs and investors are looking for the best ways to protect from it,” notes Sankar Sharma, Investing Authority and the Founder of RiskRewardReturn.com . “Where there is a problem there is a solution. Investors can invest in the consumer staples, energy, utilities, … [Read more...] about 4 Expert Inflation Protection Strategies To Implement Now
Major Moves The U.S. stock market has had a rough two weeks. Beginning on May 22, bearish pressure started to mount as crude oil prices started falling and stocks in the energy sector began to lose ground. By the next day (May 23), the bearishness had spread throughout the market, and the major indexes started pulling back. While many of the sectors in the S&P 500 have been moving in lock step with each other during these turbulent weeks, a few have stood out for either their out-performance or their under-performance. You can see how this has played out in the hourly sector-comparison chart below, which uses the following sector-based ETFs managed by State Street Global Advisors: Technology Select Sector SPDR Fund ( XLK ) Real Estate Select Sector SPDR Fund ( XLRE ) Consumer Staples Select Sector SPDR Fund ( XLP ) Consumer Discretionary Select Sector SPDR Fund ( XLY ) Health Care Select Sector SPDR Fund ( XLV ) Materials Select Sector SPDR Fund ( … [Read more...] about Can the FOMC Combat the Impact of Tariffs?
Major Moves After President Trump postponed the tariffs that U.S. importers would have had to pay on $200 billion of Chinese goods beginning on March 2, the S&P 500 hit a new short-term high today. However, a new tariff deadline or a schedule for meetings with Chinese President Xi were not provided by President Trump via his Twitter feed. The initial rally in U.S. equities faded through the rest of the day as interest rate-sensitive sectors like utilities and real estate declined. However, Chinese stock indexes continued to have the best day since 2015 following the trade news. As you can see in the following chart, the Shanghai Composite Index reached its full price projection based on the depth of the double bottom pattern formed in January. S&P 500 The worst performing sectors and stocks in the S&P 500 included just about anything paying a larger than average dividend yield like consumer staples, utilities and real estate investment trusts (REITs). … [Read more...] about Trade Rally Fades on Rising Uncertainty
Share to Twitter Share to Linkedin There seems to be a lot of confusion about whether annuities are good or bad. Some of it stems from viewing the product as complex and too time-consuming to study and understand. But I don’t see annuities being any more complicated than other financial products. For example, one type of annuity is simply like a pension, and there’s almost no one who thinks a pension is bad. Annuities are a type of insurance product. By purchasing one, you’re transferring risk to the insurance company just as you do with home, auto, or life insurance coverage. With annuity products, the insurer is assuming some, if not all, of the longevity or market risk and charging a fee doing so. Risk mitigation is common to all types of annuity products, yet they differ markedly in other ways. Variable Annuities When people talk about contract complexity and high fees, they’re usually referring to variable annuities. I find these products are … [Read more...] about Do Annuities Make Sense For Anyone?
PHUKET: I used to write about the trend-following sector. Many of the funds I still use went decades with the steadiest performance in the investment industry, while still giving investors above-average returns. Sadly, in the period of low interest rates and volatility following the financial crisis, the entire asset class has struggled. The steady year-after-year forward progress seemed to turn upside down and many funds were down three out of four years after having gone decades without a single bad year. This year, however, it seems that they are back in a big way and the recent volatility in oil prices appears to have been one of the biggest causes. It doesn’t matter if the underlying commodities go down or up for this style of fund to make a good return, but there does need to be movement, and there certainly has been just that in the oil market as of late. At the time of this writing, the two major benchmarks are were off by about 38% from the 2014 highs that hit in June. … [Read more...] about Finance: Oil volatility good for asset class
Major Moves Trading was aimless during today's session as economic and earnings data came in below expectations. While there was plenty of bad news, some of the media's hand-wringing was a great example of post-hoc rationalization. This was particularly true in the energy sector. Each Wednesday, the Energy Information Administration (EIA) releases a report of oil inventories held by commercial firms in the U.S. Like most weekly reports, the data can be very "noisy," with wide swings from week to week. In a bullish oil market, we would like to see inventories fall because purchases and shipping are picking up. The weekly oil inventory report swung back hard today to show an increase of 7.1 million barrels versus a decrease of 8.6 million barrels last week. When the two data points are added together, we see a small net decrease over the past two weeks that is more likely to be an accurate reflection of the market. Most traders expected today's news after inventories were … [Read more...] about Resistance Firms Ahead of Labor Report
Share to Twitter Share to Linkedin At Daniel Defense , a Black Creek, GA-based manufacturer of AR-15 semi-automatic rifles and accessories, founder Marty Daniel saw sales spike last year when it looked like Hillary Clinton would win the presidency. Though he supports Donald Trump, his customers aren’t buying as many firearms now that they have a National Rifle Association supporter in the White House. But Daniel, 54, sees a promising long-term future for gun makers. He’s weathered sales surges and dips since he founded the company in 2001 after inventing a custom attachment for his Colt rifle and selling extra pieces online. At a 2002 gun show, he was discovered by a rep for U.S. Special Forces, which wound up signing a $20 million contract. Daniel Defense has since grown into one of the country’s largest privately held producers of guns and accessories, with $73 million in 2016 sales, a gross profit margin of 35% and 279 employees. In this interview, which has … [Read more...] about A Gun Maker Reveals What Trump’s Presidency Means For His Business
While we have talked about the general froth in the initial public offering (IPO) market, it is time to focus on one of the major drivers – special-purpose acquisition companies (SPACs). SPAC IPOs accounted for over half of all IPOs in 2020 and are already set to make up a majority in quarter one of 2021. This is a cause for worry in the market and, more importantly, for investors who may get caught bearing the real costs of a SPAC. We'll look at the why and how of SPACs, as well as why the odds seem tilted against individual investors realizing a good return. Key Takeaways The IPO market has been frothy of late, with tech offerings seeing huge jumps in first-day trading. Within this IPO market, SPACs are making up a larger share of new offerings. This means that more and more money is hitting the market with a plan to find something to buy. SPACs give creators and sponsors structural advantages that later investors don't have, making the decision for retail … [Read more...] about SPACs Look Like a Bubble Within a Bubble