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Unless you follow the market closely every day, you should have two stock-investing modes - as a holder of stocks and as a purchaser of stocks.
And what about selling? Selling now is not a good idea. The
One of the more unpopular asset classes right now is a stock/bond hybrid called preferred shares. While they’re called shares, they have more in common with bonds. Preferred shares have a par value, coupon, and maturity date, just like bonds. And the nice thing about them is that common shareholders don’t get a penny in dividends or distributions until preferred shareholders are paid off.
I was watching Fox Business News one Friday morning when I heard that statement. I waited to hear the name of the company, but it didn’t come up again. The broadcast moved on to another topic - oil - and my attention was diverted.
Behind door number one are the market analysts. Behind door number two are the economists. And behind door number three are the CFOs. In a survey done about a month ago, they were all telling us very different things about the economy. Which group should we believe?
If you like to buy companies on the cheap - like I do - you probably look at their P/Es. That’s fine. Just know what you’re looking at. If it’s a forward P/E, ignore it.
What’s a forward P/E? Let me explain....
You can be the envy of every stockbroker… floor trader… and intra-day trader who is a prisoner of the flashing green and red indicators on his laptop. They all have to pay attention to the market. Every day. All the time.
In theory, you can make a lot of money investing in bubbles. But you have to deal with one killer problem: when to leave the party. As John Stumpf, CEO of Wells Fargo, puts it, “It is more difficult to attend a party and leave before the trouble starts than not to attend the party at all.”
Answer me this: Why have Exxon Mobil and some of the other oil majors been spending more of their cash on share buybacks than on exploration and production?
Economists really stink at predicting one of the most important events they track: Recessions. A recent study of 60 recessions that hit various countries in the 1990s found that only 3 percent of "consensus forecasts" (as they’re known in financial circles) made by groups of economists correctly predicted one of those recessions a year in advance. And when they did see one coming, they underestimated its severity by a long shot.
Invest in strong sectors. Avoid weak ones.
This seems obvious, yes? But too often, people invest in weak sectors and avoid strong ones. Here are some of the culprits behind this backward thinking:
The longer I invest, the more I realize that simple investing works best. The fewer rules you have, the better.
Simple investing should be a natural outgrowth of having more knowledge and a better understanding of how investing works. Your ability to pick out what’s truly important and what works for you is key.
Wilbur Ross is a multi-billionaire and legendary investor. He made his money by buying hated assets - like steel when nobody was touching it and Japanese banks when they were saddled with debt. (Sound familiar?)
Last year, eight out of 10 major sectors went up. The reverse is happening this year. Eight out of the 10 are now in negative territory. Materials and energy are the only holdouts. Is either one worth investing in? Or are they just laggards that will be heading down any day now?
Australian government bonds have never looked better than they do right now. And this is the perfect time to jump into them...
Wall Street has its own less helpful spin on "live and learn." It's "read and retch." So much of what we hear and read from so-called experts is simply garbage. Worst of all, it can lead to bad investment decisions.
It doesn't matter whether we're in a recession or an economic slowdown (which falls just short of a recession). The main point is, the economy is hurting.
Who's making money off of high gas prices?
Take my word for it. We're in a recession. It affects you as an investor and as a consumer. Is there anything that can bring us out of this economic tailspin? It's time to ask a few questions about the leading candidates.
Sooner or later, the market is going to hit bottom. And when it does, you'll want to be invested in small caps (companies with capitalizations of around $3.8 billion or less).
Chances are your actively managed mutual fund is disappointing you. You'd probably get better returns investing in an index fund that charges lower fees.
What's wrong with depending on the collective wisdom of the analysts who follow stocks day in and day out?
Investing right now – when the economy is so shaky – may sound mighty risky. In fact, your main concern is probably not how much money you can make ... but how well you can keep your existing money safe.
What trumps a stalled economy? Demographics. And what are the two biggest demographic trends today?
Many investors swear by the "efficient market theory." All it means is that through the magic of millions of investors buying and selling stock every day, you get what you pay for. If a company is cheap, it's cheap for a reason. If it's expensive, it's expensive for a reason.
Guess what? What with the recession... the subprime crisis... foreclosures... inflation... and more, your portfolio is very likely flying into uncharted weather.
At the end of 2006, only 11 percent of workers had outstanding loans from their retirement plans. At the end of 2007, 18 percent had such loans. As we're approaching Memorial Day weekend, I'm betting it's well over 20 percent.
If you want to invest in bonds (these are U.S. bonds but you can do the same exercise with bonds from other countries), which ones do you choose? Here's how to break this chart down in order to select the best deal.
The two surefire ways to make money off boomers is now down to one. But that one way looks stronger than ever - and if you haven't invested accordingly, you should do it now.
Oil is still making new highs and supply is still very tight. Wait for the price to head down. Then simply be willing to believe in and act on what you're seeing.
Some say the emerging market countries have great economic growth and fundamentals that are being ignored. Others say their markets are valued almost as high as the U.S. markets. They're not a great buy anymore.
To make money on stocks, go where the growth is. Right now, the so-called frontier markets are hogging it.
Maybe you know we're in a bear market. But do you know what stage of the bear we're in?
Dozens, if not hundreds, of companies are pretending they're not holding the Old Maid. In other words, they're hiding the full extent of their bad debt, assets, and hedges.
You didn't read it here first. The companies that now look the most attractive are those that can take advantage of the falling dollar...
Can you make money from inflation? Sure you can. Just figure out where the inflation is coming from.
This quarter, according to a new number from TrimTabs Investment Research, we're poorer than we were a year ago.
For the economy to turn around, individuals have to stop living off their credit cards. (If you're in debt, how can you save? How can you follow my investment tips? How can you sleep at night?)
I can see it now. The first good week the market has, there will be a slew of headlines using the same words but making very different points.