In late 2015, before the first interest rate hike in ten years, Goldman Sachs (NYSE: GS) released a note to investors about financial companies that stood to benefit from a lift in interest rates. The company namechecked Ramond James (NYSE: RJF), Bank of New York Mellon (NYSE: BK), Northern Trust (Nasdaq: NTRS) and Bank of America (NYSE: BAC) in particular, as potential winners in the event that the Federal Reserve raised rates by 50 basis points… a bit of an outlier, but an interesting hypothesis nonetheless. Goldman said that these companies would benefit from a 50 basis-point hike because they… Read More

In late 2015, before the first interest rate hike in ten years, Goldman Sachs (NYSE: GS) released a note to investors about financial companies that stood to benefit from a lift in interest rates. The company namechecked Ramond James (NYSE: RJF), Bank of New York Mellon (NYSE: BK), Northern Trust (Nasdaq: NTRS) and Bank of America (NYSE: BAC) in particular, as potential winners in the event that the Federal Reserve raised rates by 50 basis points… a bit of an outlier, but an interesting hypothesis nonetheless. Goldman said that these companies would benefit from a 50 basis-point hike because they would “get most of the earnings upside from rates in the initial hikes rather than relying on normalized rates.” But did they? Not according to their share price movements. These four companies have been flat to down during the past nine months since the hike… Historical data doesn’t back up Goldman, either. From Fortune, on December 16, 2015, the day of the rate hike: Banks often get pointed at as potential buys when interest rates rise. And share of the biggest banks have been rising lately. That’s because they can benefit from higher interest rates as long… Read More

Yesterday, I told you about a select group of stocks we’ve come to refer to around the StreetAuthority office as “Forever Stocks.”  For those of you aren’t familiar, these are the companies that have rewarded shareholders for generations. They outlast (and in some cases outperform) during even the worst economic and market conditions. That’s because not only do these companies often sport durable brand names and impenetrable economic moats, but they have strong competitive advantages that help them consistently outperform the market for decades. — Recommended Link — 10 Top ‘Buys’ With Political Backing What better way to get on the… Read More

Yesterday, I told you about a select group of stocks we’ve come to refer to around the StreetAuthority office as “Forever Stocks.”  For those of you aren’t familiar, these are the companies that have rewarded shareholders for generations. They outlast (and in some cases outperform) during even the worst economic and market conditions. That’s because not only do these companies often sport durable brand names and impenetrable economic moats, but they have strong competitive advantages that help them consistently outperform the market for decades. — Recommended Link — 10 Top ‘Buys’ With Political Backing What better way to get on the “millionaire track” than investing in companies owned by millionaires who also happen to write the law? In this special presentation, you’ll get the names and tickers of several of congress’ favorite stocks. Details here. In my previous essay, I went into further detail about Forever Stocks and even gave away the name and ticker symbol of one company you could consider holding “forever.” (To read that issue, go here.) #-ad_banner-# I also mentioned that my colleague Jimmy Butts recently identified seven of his absolute favorite Forever Stocks his latest report. And while I won’t give those names away out of… Read More

Ok. I was a little early with my call on rising bond yields. In fact, they actually went down a little after I wrote that article. However, last week, bonds saw a healthy sell off which, naturally, bumped interest rates up. The blame fell on hawkish comments from a Fed official concerned about an economy that could overheat due to stubbornly low interest rates. Maybe someone should remind him that they’ve already gone up in the past year. When the Federal Reserve raised their target Fed funds rates (the interest rate they charge member banks) towards the end of… Read More

Ok. I was a little early with my call on rising bond yields. In fact, they actually went down a little after I wrote that article. However, last week, bonds saw a healthy sell off which, naturally, bumped interest rates up. The blame fell on hawkish comments from a Fed official concerned about an economy that could overheat due to stubbornly low interest rates. Maybe someone should remind him that they’ve already gone up in the past year. When the Federal Reserve raised their target Fed funds rates (the interest rate they charge member banks) towards the end of last year, they literally more than doubled interest rates. And with Fed Funds being right at 40 basis points, the Fed is within striking distance of its current target for the Fed Funds rate of 50 basis points. Stock markets reacted negatively to the change, and stayed depressed until spring of this year. But bond yields stayed stubbornly low. That may be changing. Since bottoming in July, the yield on the 10-year treasury has risen 22%. The longer end of the treasury yields has also gone up. #-ad_banner-#On average, long rates are up 17%; a significant number. With… Read More

What do Coca-Cola (NYSE: KO), Campbell’s Soup (NYSE: CPB) and Deere & Co. (NYSE: DE) all have in common? In short, they’ve all survived some of the biggest economic catastrophes the world has ever seen. While thousands of business have come and gone since the early 1900s, these companies have managed to prosper through more than a century of political and economic turbulence. So what’s allowed these companies to continually generate wealth for shareholders despite two world wars, the Great Depression, and countless bull markets and recessions? It’s simple: They all belong to a select group of investments that we… Read More

What do Coca-Cola (NYSE: KO), Campbell’s Soup (NYSE: CPB) and Deere & Co. (NYSE: DE) all have in common? In short, they’ve all survived some of the biggest economic catastrophes the world has ever seen. While thousands of business have come and gone since the early 1900s, these companies have managed to prosper through more than a century of political and economic turbulence. So what’s allowed these companies to continually generate wealth for shareholders despite two world wars, the Great Depression, and countless bull markets and recessions? It’s simple: They all belong to a select group of investments that we like to call Forever Stocks. — Sponsored Link — Grab Fast 290% Profit With ORRP The lithium industry just tripled in value as demand is reaching epic proportions. As the world races to buy as much as possible, early shareholders in ORRP could be the biggest benefactors. Read this report before your chance at 290% profits is gone. For those of you aren’t familiar, Forever Stocks is a distinction we’ve come up with at StreetAuthority for companies that have rewarded shareholders for generations. Not only do these companies often sport durable brand… Read More

After two months of sideways market action, during which I’ve been warning of a stock market correction, the dam finally broke on Friday. The decline was led by the small-cap Russell 2000, which lost 2.6% for the week. But the move was broad-based, as all major indices finished more than 2% lower last week. #-ad_banner-# Depending on what you read, Friday’s sell-off was either triggered by institutional bond investor Jeffrey Gundlach of DoubleLine Capital’s talk of surprise tightening by the Federal Reserve or… Read More

After two months of sideways market action, during which I’ve been warning of a stock market correction, the dam finally broke on Friday. The decline was led by the small-cap Russell 2000, which lost 2.6% for the week. But the move was broad-based, as all major indices finished more than 2% lower last week. #-ad_banner-# Depending on what you read, Friday’s sell-off was either triggered by institutional bond investor Jeffrey Gundlach of DoubleLine Capital’s talk of surprise tightening by the Federal Reserve or Boston Fed President Eric Rosengren stating that it has become increasingly risky to delay an interest rate hike. In my opinion, though, Friday’s collapse was the result of two months of extreme investor complacency, as evidenced by a historically low Volatility S&P 500 (VIX) index (which I began talking about in the July 18 Market Outlook), rather than any particular statement by an influential market voice. In other words, the market has been vulnerable to a scare for months, and last week’s remarks by Gundlach and Rosengren were just the trigger to a gun that was… Read More

With more than a third of the global sovereign bonds market offering negative yields, it’s no surprise that investors have flocked to any source for cash yield.  The global hunt for yield has pushed prices up and rates down for everything from bonds to dividend stocks. You see it in the yield on the 10-year Treasury, which has fallen 1.26% over the last three years despite the fact that the Fed is aggressively trying to prepare investors for an increase in the Fed Funds Rate. You also see it in valuations for traditional dividend-paying sectors.  #-ad_banner-#Traditional dividend picks in consumer… Read More

With more than a third of the global sovereign bonds market offering negative yields, it’s no surprise that investors have flocked to any source for cash yield.  The global hunt for yield has pushed prices up and rates down for everything from bonds to dividend stocks. You see it in the yield on the 10-year Treasury, which has fallen 1.26% over the last three years despite the fact that the Fed is aggressively trying to prepare investors for an increase in the Fed Funds Rate. You also see it in valuations for traditional dividend-paying sectors.  #-ad_banner-#Traditional dividend picks in consumer staples and utilities are trading well above historic valuation multiples, creating a bubble that is destroying conventional views on safety sectors. The consumer staples sector is trading for almost 21-times expected earnings over the next year, a premium of 25% over its 10-year average, while utilities are trading 22% over their average at 17.8-times forward earnings. Those safety sectors offered no shelter in Friday’s 2.45% selloff in the S&P 500. Utilities fell more than any other sector with a 3.75% plunge on rate fears, and consumer staples underperformed the market with a 2.71% loss on the day.  In fact, the… Read More

Bill Gates walks up to you in a bar. He sits down and says he wants you to make an important financial decision. “Would you rather accept a check for one million dollars right now, or a penny today that will double in value every day for the next 30 days?” Without pulling out a calculator, what would you do? #-ad_banner-#According to my own personal survey, most people would take the million dollars. However, this option leaves quite a bit of money on the table. By quite a bit I mean about $4 million. After 30 days, that one penny… Read More

Bill Gates walks up to you in a bar. He sits down and says he wants you to make an important financial decision. “Would you rather accept a check for one million dollars right now, or a penny today that will double in value every day for the next 30 days?” Without pulling out a calculator, what would you do? #-ad_banner-#According to my own personal survey, most people would take the million dollars. However, this option leaves quite a bit of money on the table. By quite a bit I mean about $4 million. After 30 days, that one penny doubling every day would be worth $5 million. This financial brain teaser is the reason the dividend aristocrats are enriching so many investors. Let me explain. The dividend aristocrats is the small group of S&P 500 companies that have raised their dividend every year for 20 years. In 2016, just 53 of the S&P 500 qualified for this elite distinction — a little more than 10% of the index. On the surface, most investors go for the higher yield, just like the lure of taking the $1 million from Bill Gates. I know because as an investment advisor, my clients… Read More

As you might expect, I get lots of requests from StreetAuthority readers looking to supercharge their income with payouts that are three to four times higher than the market average. I think one of my recent recommendations in my premium newsletter, High-Yield Investing, fits the bill (the stock has a yield of 8%).  #-ad_banner-#But I also receive letters from retirees willing to accept half of that in exchange for lower volatility and reliable “all-weather” performance. With capital preservation as the foremost goal, they don’t want to take risks with their nest egg. As such, these readers are mostly interested in… Read More

As you might expect, I get lots of requests from StreetAuthority readers looking to supercharge their income with payouts that are three to four times higher than the market average. I think one of my recent recommendations in my premium newsletter, High-Yield Investing, fits the bill (the stock has a yield of 8%).  #-ad_banner-#But I also receive letters from retirees willing to accept half of that in exchange for lower volatility and reliable “all-weather” performance. With capital preservation as the foremost goal, they don’t want to take risks with their nest egg. As such, these readers are mostly interested in rock-solid companies built to deliver consistent profit and dividend growth even in tough conditions.  We have a diverse audience in High-Yield Investing, so I try to provide a mix of recommendations that will speak to everybody. And the stock screen I’d like to share with you today is primarily aimed at more conservative investors. However, even younger subscribers with aggressive goals should tune in — because we’re looking at blue-chips that can help anchor your portfolio.  Why Consumer-Staple Stocks Belong In Your Portfolio There are many wild cards that could rattle the market in the weeks and months ahead…… Read More