February 10, 2012
Posted by Dr. Stephen Leeb
“Contrarian investors typically like out-of-favor situations where the masses have ignored or dismissed certain stocks or sectors. The theory is that barring insolvency, those same masses will eventually return, generating handsome profits for those brave enough to buy when prices were low. There are risks, primarily if the masses prove to be 100% correct, and being a contrarian requires both fortitude and patience. But human nature being what it is, and Wall Street being very much a reflection of group emotion and psychology, contrarian strategies generally work. Read More »
December 10, 2011
Posted by Vita Nelson
Vita Nelson’s The Moneypaper specializes in direct investing through dividend-reinvestment plans, or DRIPs. However, this month Nelson also provided subscribers with some helpful advice for investing in fixed-income instruments in today’s low-yield environment, and explained the pros and cons of various types of bond funds.
Read More »
November 11, 2011
Posted by Elliott H. Gue
“Don’t be a yield zombie. An exchange-traded fund that yields more than 20% is just as risky as a stock that offers a similar yield.
“With interest rates at rock-bottom levels and equity markets enduring severe fluctuations, low-volatility income streams are scarce. Consequently, investors have resorted to unconventional income investments to boost their yields, especially in the realm of exchange-traded products (ETP). Consider the popularity of UBS E-TRACS 2X Wells Fargo Business Development Company Index (BDCL), a leveraged exchange-traded note (ETN) that delivers twice the monthly performance of the Wells Fargo Business Development Company Index. This index tracks a basket of 26 business development companies (BDC), publicly traded private-equity firms that invest in or lend to start-ups or small companies. Read More »
October 14, 2011
Posted by John Buckingham
“Some have warned that income-producing stocks have become a ‘crowded trade.’ We would argue that the nearly 14% plunge during the third quarter in the broad-based S&P 500 index, where 389 members pay a dividend, suggests otherwise. To be sure, ‘defensive’ areas of the S&P, like Utilities (+10.7%), Consumer Staples (+3.4%) and Health Care (+2.5%), were actually in the green for total returns over the first three quarters of 2011, with the first two among the three highest-yielding of the 10 S&P GICS sectors. Of course, Financials (-25.2%) and Materials (-21.8%) have received little love so far this year, despite generous dividend yields of 2.5% and 2.7%, respectively. Read More »
September 9, 2011
Posted by Vita Nelson
“As has become abundantly clear this summer, the federal government has a debt crisis. In the past 10 years, U.S. Treasury obligations have risen from less than $6 trillion to more than $15 trillion. Normally, a borrower loading up on debt in this manner becomes less creditworthy. Indeed, Standard & Poor’s just dropped the credit rating of U.S. debt from AAA to AA+. (Moody’s and Fitch, the other two rating agencies, affirmed their AAA rating.) Read More »
