I love discovering alpha in the stock market. Alpha, in this context, means excess returns relative to the return of a passive index fund over the same time period.  Alpha is the goal of every investor regardless of size, from the largest hedge funds to everyday investors. Sometimes, it takes looking outside of your comfort zone to find alpha. And right now, the emerging markets are where it’s at.  Emerging markets have soared over 17% this year. This is nearly 300% higher performance than the 6% or so year-to-date return of the S&P 500.  How Do I Invest In Emerging… Read More

I love discovering alpha in the stock market. Alpha, in this context, means excess returns relative to the return of a passive index fund over the same time period.  Alpha is the goal of every investor regardless of size, from the largest hedge funds to everyday investors. Sometimes, it takes looking outside of your comfort zone to find alpha. And right now, the emerging markets are where it’s at.  Emerging markets have soared over 17% this year. This is nearly 300% higher performance than the 6% or so year-to-date return of the S&P 500.  How Do I Invest In Emerging Markets? Don’t worry, it’s easy! Today’s stock market investors can capture emerging markets alpha via ETFs. Once reserved for wealthy and connected investors, ETFs are now available for every investor. Investing in ETFs is no different than buying any stock. ETFs provide ready-built diversification, liquidity, and access to a wide variety of markets.  There are genuinely diversified ETFs holding a basket of stocks across the emerging markets, and there are others that are nation- or even industry-specific.  3 Ways To Play Emerging Markets  1. India India is my favorite emerging market right now. The once-struggling economy has gained… Read More

On Wednesday, May 17, the Dow and S&P 500 took a nose dive, recording their worst day since last September as the political side-show in Washington D.C. threatened the market’s eight-year bull run. While stocks have recovered from the selloff, all eyes are still on Washington for risks to the market. But political risk isn’t the biggest hurdle to stock gains. The biggest risk, one that has been building for more than a year, is now spreading and could be about to put the brakes on consumer spending and the entire economy. Real evidence is mounting that a consumer credit… Read More

On Wednesday, May 17, the Dow and S&P 500 took a nose dive, recording their worst day since last September as the political side-show in Washington D.C. threatened the market’s eight-year bull run. While stocks have recovered from the selloff, all eyes are still on Washington for risks to the market. But political risk isn’t the biggest hurdle to stock gains. The biggest risk, one that has been building for more than a year, is now spreading and could be about to put the brakes on consumer spending and the entire economy. Real evidence is mounting that a consumer credit crisis is brewing in America. It’s an eerie reminder of the mortgage crisis and could turn out to be just as spectacular when it all comes crashing down. The Crisis In Auto Loans Is Spilling Into Consumer Loans The crisis has been building in auto loans for over a year, as rock-bottom interest rates sent sales of cars to consecutive annual records. When car prices started to increase, lenders relaxed standards and nearly doubled the amount of time people could pay on the loan. The total amount of auto loans outstanding has jumped 50% since 2010. But cracks started… Read More

We considered it “one of the biggest areas of opportunity in the coming years.” We even said, “this portfolio could provide some very lucrative picks…”  That was back in January 2015, when I first introduced the my International Opportunities portfolio to my premium newsletter, Maximum Profit.  At the time, I knew that the international space was fraught with rick — and opportunity. And with the power of the Maximum Profit system — which relies on two proven indicators (one fundamental and one technical) — I’d be able to sift through to find the real gems of this space. To be… Read More

We considered it “one of the biggest areas of opportunity in the coming years.” We even said, “this portfolio could provide some very lucrative picks…”  That was back in January 2015, when I first introduced the my International Opportunities portfolio to my premium newsletter, Maximum Profit.  At the time, I knew that the international space was fraught with rick — and opportunity. And with the power of the Maximum Profit system — which relies on two proven indicators (one fundamental and one technical) — I’d be able to sift through to find the real gems of this space. To be frank, however, the portfolio hasn’t quite lived up to my expectations. But I believe that’s beginning to change. I’ll touch on that in a moment… The portfolio started off booking a string of winners. Of the first six closed positions, five were winners with an average gain of 9% — nothing to write home about until you consider the fact that the average holding period was only 40 days. The only loss came in at 3%.  —Recommended Link— Use These ‘Rockefeller Stocks’ To Unlock Your Natural Resource Fortune! Rockefeller’s favorite thing in the world was to “see his dividends coming… Read More

I knew it couldn’t last forever. From April 24 through May 8, the S&P 500 went 10 straight trading sessions going no lower than 2,379 and no higher than 2,401. That’s an ultra-narrow band of just 22 points.  So in two full weeks, the index didn’t fluctuate up or down by so much as 1%. According to Factset Research, this has only happened 10 times in the past four decades.  But there are no guarantees in the investment world, and I knew volatility would return. Without a doubt, I knew we’d eventually see one of those crazy days where the… Read More

I knew it couldn’t last forever. From April 24 through May 8, the S&P 500 went 10 straight trading sessions going no lower than 2,379 and no higher than 2,401. That’s an ultra-narrow band of just 22 points.  So in two full weeks, the index didn’t fluctuate up or down by so much as 1%. According to Factset Research, this has only happened 10 times in the past four decades.  But there are no guarantees in the investment world, and I knew volatility would return. Without a doubt, I knew we’d eventually see one of those crazy days where the Dow Jones Industrial Average swings up or down by a few hundred points.  That day was this past Wednesday, May 17. Both the Dow and S&P 500 lost 1.8%, their worst losses since September 2016. The news had every investor checking the financial sites to see how high (or low) our portfolio holdings were trading.  But we don’t have to resign ourselves to living with this type of volatility. Stay Out Of “Sensitive” Stocks You’ve probably noticed that on “up” days when most stocks are in the green, some holdings always seem to ride a little bit higher than… Read More

I love dividend stocks, but income investors face an inherent disadvantage against growth investors, one that costs them tens of thousands over decades of investing. The disadvantage comes from the regular taxation of your dividend earnings. Each year, Uncle Sam takes his cut of your hard-earned dividend payments. Since part of the returns of dividend stocks is lost each year, you lose the power of compounding seen in investments that aren’t taxed until sold. An investor in a dividend stock paying a 7% yield annually would see a $10,000 investment grow to $51,276 over 30 years, assuming reinvested dividends and… Read More

I love dividend stocks, but income investors face an inherent disadvantage against growth investors, one that costs them tens of thousands over decades of investing. The disadvantage comes from the regular taxation of your dividend earnings. Each year, Uncle Sam takes his cut of your hard-earned dividend payments. Since part of the returns of dividend stocks is lost each year, you lose the power of compounding seen in investments that aren’t taxed until sold. An investor in a dividend stock paying a 7% yield annually would see a $10,000 investment grow to $51,276 over 30 years, assuming reinvested dividends and a 20% rate on qualified dividends.  An investor putting $10,000 in a stock with a 7% price return but no dividend would see the investment grow to $60,898 over the same period (after adjusting for the one-time capital gains tax). The dividend investor has lost nearly $10,000 to the annual tax burden. There’s one way to save this money and get the most out of your dividend investments — by holding high-yield stocks in a tax-advantaged retirement account like an IRA.  Sharing Your Dividend Income With Uncle Sam Qualified dividend payments, paid when the investment is held for at… Read More

I have to admit, this past Wednesday gave me a bit of a jolt.  All of the major indices were down sharply, as investors began to get nervous about news from Washington D.C. The S&P 500 suffered its largest one-day drop since September. Meanwhile, the Dow Jones Industrial Average lost 1.78% and the Nasdaq gave up 2.57%. All of a sudden, it seemed, investors were waking up from a haze of complacency. After all, prior to Wednesday, volatility in S&P 500 options (measured by the VIX) had reached a 24-year low. That’s usually a sign that the market is about… Read More

I have to admit, this past Wednesday gave me a bit of a jolt.  All of the major indices were down sharply, as investors began to get nervous about news from Washington D.C. The S&P 500 suffered its largest one-day drop since September. Meanwhile, the Dow Jones Industrial Average lost 1.78% and the Nasdaq gave up 2.57%. All of a sudden, it seemed, investors were waking up from a haze of complacency. After all, prior to Wednesday, volatility in S&P 500 options (measured by the VIX) had reached a 24-year low. That’s usually a sign that the market is about to crash. Would this be the day the shoe finally dropped and marked the end of the bull market?  Interestingly, the catalyst for Wednesday’s drop wasn’t from any revelations from Washington about tax policy, infrastructure spending, or the like. Rather, it was because of new reports about President Trump, the Russians, the FBI and the like.  I won’t get into further details — chances are, you’ve already formed your own opinions. But if you’re like me, you’re waiting until more information comes out before forming any judgments. Yes, things could get ugly — more bad news could come out that… Read More

Utility stocks can best be described as the four-door, mid-sized sedan of equity investing: boring. Nothing sexy about them — they get you from point A to point B. Investors own utilities for the steady, above-average dividends just as people buy bland, mid-size sedans because they need something that just works. But sometimes both can seem overpriced. In 1987, the base price of a new, Honda Accord was around $9,795. Today, that base price is around $22,455, which implies an annual price increase of 4.3%; 33.5% more than the average annual inflation rate of 3.22% for the same time period. Read More

Utility stocks can best be described as the four-door, mid-sized sedan of equity investing: boring. Nothing sexy about them — they get you from point A to point B. Investors own utilities for the steady, above-average dividends just as people buy bland, mid-size sedans because they need something that just works. But sometimes both can seem overpriced. In 1987, the base price of a new, Honda Accord was around $9,795. Today, that base price is around $22,455, which implies an annual price increase of 4.3%; 33.5% more than the average annual inflation rate of 3.22% for the same time period. So, while that mid-sized sedan may still seem like a bargain, it’s gotten slightly more expensive over the longer haul. Utility stocks also outperformed inflation during a similar run. The average yield of utility stocks over the last 25 years has been 3.96% while inflation has averaged around 2.11% for the same period. Over the long haul, dividend paying-utility stocks delivered exactly what they should which is to keep pace with inflation. But sometimes utility stocks, like that boring sedan, can look expensive. The sector has been dealing with this recently. After a post-election dip that coincided with… Read More

As I repeatedly scan the markets for the best opportunities, my searches all seem to lead to two areas. The first is the social technology sector — Google, Facebook, Amazon, etc. It contains some great stocks, but most are so heavily bid up that it’s hard to justify an entry here — at least, not until a pullback. The second, equally exciting area is defense and travel technology. This area is less popular and less understood than social tech, creating more potential value on average. There are several companies that thrive in this genre, but one keeps rising to the… Read More

As I repeatedly scan the markets for the best opportunities, my searches all seem to lead to two areas. The first is the social technology sector — Google, Facebook, Amazon, etc. It contains some great stocks, but most are so heavily bid up that it’s hard to justify an entry here — at least, not until a pullback. The second, equally exciting area is defense and travel technology. This area is less popular and less understood than social tech, creating more potential value on average. There are several companies that thrive in this genre, but one keeps rising to the top of my list: Rockwell Collins (NYSE: COL). My original thesis was centered on COL becoming more of a “household name,” but both of our recent wins had little to do with Rockwell’s broad recognition as a great company. The first rally was attributed to a boost in the entire defense group (thanks to action from North Korea) followed by a better-than-expected earnings report. Both of these events are certainly great news for the company, but I still feel that Rockwell’s true value is underestimated and that its recent acquisition of BE Aerospace isn’t getting the credit it deserves. Rockwell… Read More