The surprising announcement last month of Amazon’s (Nasdaq: AMZN) intention to acquire high-end grocer Whole Foods Market (Nasdaq: WFM) conforms to the age-old notion that nobody can do it alone. Even Amazon — the original “if you build it, they will come” company… the company that never cared much about margins but was obsessed about volume (which turned out to be just the right solution for e-commerce) — couldn’t do it all without the help of others.  Quite often, this help has come in the form of an acquisition. Of course, the $13.7 billion purchase of Whole Foods, if it… Read More

The surprising announcement last month of Amazon’s (Nasdaq: AMZN) intention to acquire high-end grocer Whole Foods Market (Nasdaq: WFM) conforms to the age-old notion that nobody can do it alone. Even Amazon — the original “if you build it, they will come” company… the company that never cared much about margins but was obsessed about volume (which turned out to be just the right solution for e-commerce) — couldn’t do it all without the help of others.  Quite often, this help has come in the form of an acquisition. Of course, the $13.7 billion purchase of Whole Foods, if it goes through, would be the company’s largest acquisition to date. But Amazon has also used smaller acquisitions to help build its grand vision.  Since going public in 1997, all its acquisitions have resulted in the creation of the Amazon we know now. For example, in 1998, the company made a somewhat puzzling purchase of IMDB, a leading website for facts and information about TV and movies; now it serves as both a content provider and a marketing tool. Its 1999 purchase of Alexa, then just a web navigation service, is now a subsidiary for web analytics and search engine optimization… Read More

One of my first lessons in investing came from a physician who lived in the building where I worked as a doorman while in college. The year was 1981 and I was just finishing my sophomore year.  The job didn’t pay much, but it offered plenty of solitude to study during the week. But the weekends were a different story.  Saturdays brought lots of unsolicited advice from the residents — mostly about how to be successful in life. Years later I came to believe those Saturday afternoons were just as valuable as my formal education. One weekend, a doctor who… Read More

One of my first lessons in investing came from a physician who lived in the building where I worked as a doorman while in college. The year was 1981 and I was just finishing my sophomore year.  The job didn’t pay much, but it offered plenty of solitude to study during the week. But the weekends were a different story.  Saturdays brought lots of unsolicited advice from the residents — mostly about how to be successful in life. Years later I came to believe those Saturday afternoons were just as valuable as my formal education. One weekend, a doctor who lived in the building told me to buy stock in Chrysler. He said it was a great stock at its current price of $3 per share. I didn’t know much about investing, so I did my homework. I quickly learned that most analysts thought the company was heading to liquidation. In fact, just about everything I read told me to avoid the stock at all costs. But the doctor told me they were wrong… Trusting the doctor, I combined my next paycheck with a small loan from my dad. I bought 100 shares of Chrysler — my entire life’s savings… Read More

America is in the middle of a massive retirement tsunami. Starting in 2010, 10,000 baby boomers began reaching the retirement age of 65 every single day. Looking forward, this trend is just beginning. 10,000 more boomers will reach the retirement age of 65 every day for the next 12 years, all the way until 2030. With bond yields stuck near record lows, boomers are desperate to find safe alternatives to generate retirement income. One of the most popular places they have been shifting their capital is utility stocks. Utility stocks offer two things that retirees value. First, they are generally… Read More

America is in the middle of a massive retirement tsunami. Starting in 2010, 10,000 baby boomers began reaching the retirement age of 65 every single day. Looking forward, this trend is just beginning. 10,000 more boomers will reach the retirement age of 65 every day for the next 12 years, all the way until 2030. With bond yields stuck near record lows, boomers are desperate to find safe alternatives to generate retirement income. One of the most popular places they have been shifting their capital is utility stocks. Utility stocks offer two things that retirees value. First, they are generally a lot more stable than the broader stock market and particularly growth stocks. Second, utility stocks usually offer excellent dividends. The popularity of utility stocks has led to big gains for the Vanguard Utilities Index Fund ETF (NYSE: VPU). In the last ten years, this ETF has gained 127.7%, outperforming the S&P 500’s return by 17%. Take a look below. Those gains have been great for current shareholders. However, for new boomers looking, it has created a problem: U.S. utility stocks look pricey. VPU’s forward P/E ratio of 18.5 is in line with the S&P 500, despite little… Read More

Baby steps.  This is how most investors start, with a smallish sum of money and only a few positions.  Over time, these holdings appreciate, and investors put additional money to work. The portfolio grows, and with that, so does its complexity. Sooner or later, many investors begin to feel the need to get organized. And for that, they need to understand the basic rules of portfolio building.  Of course, as a finance professional, I think this should be filed under the category “the sooner, the better.” Investing is a serious affair, and it’s good to follow the basics from the… Read More

Baby steps.  This is how most investors start, with a smallish sum of money and only a few positions.  Over time, these holdings appreciate, and investors put additional money to work. The portfolio grows, and with that, so does its complexity. Sooner or later, many investors begin to feel the need to get organized. And for that, they need to understand the basic rules of portfolio building.  Of course, as a finance professional, I think this should be filed under the category “the sooner, the better.” Investing is a serious affair, and it’s good to follow the basics from the beginning. But it’s never too late to start.  The first decision any investor should make is all about asset allocation. The exact portfolio allocation for stocks, bonds and cash should largely depend on an investor’s own time horizon and risk tolerance. General guidelines can be applied , however, nobody knows your situation better than you do, and the process of determining where you want your money to go is much more personal than any newsletter allows.  —Recommended Link— Make This Move For A Millionaire Retirement If you want a millionaire retirement, you need to check this move out. It… Read More

Here we are again at the halfway point in another trading year. What’s happened? What’s going to happen? I’m not sure of what will happen going forward. But we can look in the rearview mirror and try to position our investments as prudently as we can based on what we already know. A lot of variables can affect the outcome: Interest rates, the economy, and geo-political events just to name a few. Let’s dive right in… Stocks Are Still Cruising In The Stratosphere Midway through 2017, U.S. equity markets seem to be in the optimism business. Year-to-date, the S&P… Read More

Here we are again at the halfway point in another trading year. What’s happened? What’s going to happen? I’m not sure of what will happen going forward. But we can look in the rearview mirror and try to position our investments as prudently as we can based on what we already know. A lot of variables can affect the outcome: Interest rates, the economy, and geo-political events just to name a few. Let’s dive right in… Stocks Are Still Cruising In The Stratosphere Midway through 2017, U.S. equity markets seem to be in the optimism business. Year-to-date, the S&P 500 index has climbed 7.6% on a price basis. Annualized, that puts us on track for better than 15% return. But will we get there? Good question! The forward P/E of the S&P 500 currently sits at 18.7 — not too terribly overvalued. If we can get through the summer doldrums without any surprises (more on that in a bit), we could at least get close. #-ad_banner-#The real story in stocks, though, is international. The MSCI EAFE index, one of the best measures of developed market performance, has turned in an impressive 12.3% year-to-date, leaving the S&P in the dust. Read More

During the June press conference of the Federal Open Market Committee (FOMC), Federal Reserve Chair Janet Yellen downplayed the recent slowdown in inflation. She even went so far as to call attention to cell phone service pricing as a temporary factor affecting inflation expectations.  Fed watchers had started to doubt whether the central bank would further increase rates this year as inflationary pressures ebbed. Yellen’s statements sent rates on the 10-year Treasury plunging as most see little evidence that the Fed will be able to reach its inflation target of 2% this year. But what if… Read More

During the June press conference of the Federal Open Market Committee (FOMC), Federal Reserve Chair Janet Yellen downplayed the recent slowdown in inflation. She even went so far as to call attention to cell phone service pricing as a temporary factor affecting inflation expectations.  Fed watchers had started to doubt whether the central bank would further increase rates this year as inflationary pressures ebbed. Yellen’s statements sent rates on the 10-year Treasury plunging as most see little evidence that the Fed will be able to reach its inflation target of 2% this year. But what if Yellen is right? What if pricing pressures are heading higher? A return to inflation after years of subdued pressure would have far-reaching effects on the economy and different assets. Not only would increased inflation send bonds reeling, but it could also derail the eight-year bull market by slowing price growth via higher interest rates. With the unemployment rate nearing 4% and economic growth pulling people back into the labor force, the Fed is firmly in disagreement with the market on the outlook for inflation.  Only one of them can be right. So Who Is Right? The markets do not… Read More