In less than a month, the world will have a new Disney theme park. This time, it’s in China. Shanghai, to be exact. The park has already been “open” for trial guests, and the company is pretty excited about the feedback it’s been getting. But Disney’s really hanging a lot on this park. The company expects to earn $300 million from the park in the third quarter of this year. #-ad_banner-#To put that in perspective, Disney (NYSE: DIS) brought in revenues of $12.97 billion in the second quarter of this year. But while you might think that Shanghai Disney’s projected… Read More

In less than a month, the world will have a new Disney theme park. This time, it’s in China. Shanghai, to be exact. The park has already been “open” for trial guests, and the company is pretty excited about the feedback it’s been getting. But Disney’s really hanging a lot on this park. The company expects to earn $300 million from the park in the third quarter of this year. #-ad_banner-#To put that in perspective, Disney (NYSE: DIS) brought in revenues of $12.97 billion in the second quarter of this year. But while you might think that Shanghai Disney’s projected haul is chump change in comparison, consider this: Disney’s net income in the second quarter was only $2.1 billion. That means a $300 million paycheck isn’t so small. Disney has spent $5 billion to bring this park to life, so it would take nearly 17 quarters, or more than 4 years worth of $300 million proceeds in order to make back its initial investment, not to mention upkeep and operational costs. So here’s the thing… Is a $5 billion theme park in China a good bet? Well, if you’re a Chinese billionaire member of the Communist Party, you might not… Read More

There’s an adage that suggests investors should “sell in May and go away.” It’s based on the theory that the market underperforms from May to October. And there have been a few academic studies that have been able to detect a seasonal pattern to market performance. There are common sense reasons why the stock market may languish over the summer months. Fewer stocks get transacted during the summer because more traders and retail investors take vacations. That can make the market more volatile, leading more investors to sell before a potentially bumpy summer. Likewise, many companies tend… Read More

There’s an adage that suggests investors should “sell in May and go away.” It’s based on the theory that the market underperforms from May to October. And there have been a few academic studies that have been able to detect a seasonal pattern to market performance. There are common sense reasons why the stock market may languish over the summer months. Fewer stocks get transacted during the summer because more traders and retail investors take vacations. That can make the market more volatile, leading more investors to sell before a potentially bumpy summer. Likewise, many companies tend to produce less during the summer months, when more of their employees take vacations. It’s been shown that companies are less likely to beat analyst expectations during a seasonally slow quarter. #-ad_banner-#If I weren’t an income investor, maybe I’d rue the summer months like growth investors do. But for me, May has become the month when I start making my watch list for summer purchases. I look forward to any opportunity to buy dividend payers at lower prices and higher yields. And that goes for my automatic dividend reinvestments as well as outright purchases. Read More

We’re approaching a major milestone. More companies are paying dividends, and those payments are getting increasingly larger as a percentage of profits. In fact, payout ratios recently reached 37%, and aggregate dividend payments among S&P 500 companies have totaled $410 billion over the past year. That’s more than $1.1 billion in dividends per day. #-ad_banner-#At least, that’s the official count. The true payout is actually much higher because there are dozens of supplemental dividends that go unreported each quarter. By unreported, I’m not talking about some secret way of transferring cash to a select… Read More

We’re approaching a major milestone. More companies are paying dividends, and those payments are getting increasingly larger as a percentage of profits. In fact, payout ratios recently reached 37%, and aggregate dividend payments among S&P 500 companies have totaled $410 billion over the past year. That’s more than $1.1 billion in dividends per day. #-ad_banner-#At least, that’s the official count. The true payout is actually much higher because there are dozens of supplemental dividends that go unreported each quarter. By unreported, I’m not talking about some secret way of transferring cash to a select group of well-connected insiders. These extra payments are dished out openly and uniformly to all shareholders. But they are considered “special.” As such, these distributions aren’t reflected in the yields you see quoted on popular financial sites like Yahoo or Morningstar. But trust me, the cash is just as green and spends just the same as any other dividend. And these special payments typically come in much bigger denominations, often 10 to 20 times larger than the firm’s regular quarterly dividend. There’s no special trick or complicated system to capturing these dividends — you… Read More

It became clear late last year that the Federal Reserve intended to finally raise short-term interest rates, which it had kept near zero for years to allow the economy to recover from the financial crisis. Years into recovery, with unemployment low and some signs of inflation pressure, the Fed felt that rates could move slightly higher, while remaining historically low. The first hike came in December, and most analysts expected two to three additional increases in 2016. But so far, no hikes have been announced this year. Weak economies abroad, continued rock-bottom energy prices and iffy corporate earnings all suggested… Read More

It became clear late last year that the Federal Reserve intended to finally raise short-term interest rates, which it had kept near zero for years to allow the economy to recover from the financial crisis. Years into recovery, with unemployment low and some signs of inflation pressure, the Fed felt that rates could move slightly higher, while remaining historically low. The first hike came in December, and most analysts expected two to three additional increases in 2016. But so far, no hikes have been announced this year. Weak economies abroad, continued rock-bottom energy prices and iffy corporate earnings all suggested that inflationary pressure was not a concern.  #-ad_banner-#But many Fed watchers now predict a mid-year increase when the Fed’s policy committee meets in June, and Fed leaders have started telegraphing the possibility of a 25-basis-point hike (0.25 percentage points) at that meeting. With the economy continuing to grow, unemployment remaining low and other economic indicators positive, it seems likely that rates will go up, as the Fed seeks to balance the need to tamp down on inflation with the need to help the economy continue to expand. And the Fed historically has been reluctant to raise rates in the months… Read More

I think it was philosopher George Santayana’s cousin who said, “Those who do not learn from history are doomed to lose money in the stock market.”  It’s amazing how quickly we forget the mistakes of the past, and now one of the biggest factors that led to the Great Recession is building up again. #-ad_banner-# A booming housing market and relaxing loan standards led to the worst economic collapse in nearly 80 years. And looking at some recent loan data gave me a… Read More

I think it was philosopher George Santayana’s cousin who said, “Those who do not learn from history are doomed to lose money in the stock market.”  It’s amazing how quickly we forget the mistakes of the past, and now one of the biggest factors that led to the Great Recession is building up again. #-ad_banner-# A booming housing market and relaxing loan standards led to the worst economic collapse in nearly 80 years. And looking at some recent loan data gave me a serious sense of deja vu. But rather than home loans, this time it is the auto loans market that’s headed for trouble. Auto Loans Headed For A Crash? Just as larger economic drivers sparked the housing boom, super-low interest rates and falling gasoline prices have caused a spike in car sales over the past five years. New car sales hit a record in 2015, while the average transaction price reached an all-time high of $34,428. Yet, sluggish wage growth and a stalling economic recovery have threatened the good times. Not wanting to see the party end, car makers and dealers have… Read More

“Sell in May and go away” the old market maxim goes. It may not be far from the truth. That would have been good advice last year. #-ad_banner-#But this year? Who knows? I’ve never been a proponent of getting completely out of the market. As a long term investor, time is always on your side, especially if you’re getting steady, respectable cash flow from your portfolio. If your portfolio is paying you a steady 7% on an annual basis (in income, not capital appreciation) and you go to cash, which is earning you nothing, what are you truly giving up… Read More

“Sell in May and go away” the old market maxim goes. It may not be far from the truth. That would have been good advice last year. #-ad_banner-#But this year? Who knows? I’ve never been a proponent of getting completely out of the market. As a long term investor, time is always on your side, especially if you’re getting steady, respectable cash flow from your portfolio. If your portfolio is paying you a steady 7% on an annual basis (in income, not capital appreciation) and you go to cash, which is earning you nothing, what are you truly giving up for a little comfort from the volatility that comes with owning stocks?  While we may or may not have a summer swoon this year (who knows with an incredibly bizarre presidential election going on), it’s always good defense to not pay too much and get paid decently while you wait. Here are three ideas, all fairly priced and yielding north of 7%. The Blackstone Group LP (NYSE: BX) — With a market cap of over $30 billion, Blackstone is a dominant global player in the alternative investment management business. Focusing on private equity, real estate, hedge fund and other multi… Read More

Over the past few weeks, I’ve shared with readers two crucial types of dividend stocks that make up my three-part Daily Paycheck Retirement Strategy. By using the right combination of dividend stocks, I’ve been able to collect more than $70,000 in… Read More

It is amazing how a stock can be a rock star one day and a pariah the next. Whereas the rock star shrugs off bits of bad news, the pariah can’t seem to get out of its own way. But when everyone seems to be shunning a stock, good things can start to happen. And that’s exactly what looks to be the case with Apple (Nasdaq: AAPL) following its fall from grace. #-ad_banner-# After years of cranking out new products and… Read More

It is amazing how a stock can be a rock star one day and a pariah the next. Whereas the rock star shrugs off bits of bad news, the pariah can’t seem to get out of its own way. But when everyone seems to be shunning a stock, good things can start to happen. And that’s exactly what looks to be the case with Apple (Nasdaq: AAPL) following its fall from grace. #-ad_banner-# After years of cranking out new products and disrupting different consumer markets, the tech giant’s stock peaked early last year — long before it reported its first quarterly revenue decline in 13 years — and it has been falling ever since.  What happened to the company that was seemingly on track to become the first with a trillion-dollar market capitalization? Just over a year ago, it was valued at $775 billion, but it now “languishes” at $536 billion and has seen Alphabet (Nasdaq: GOOGL) eclipse it as market cap champ more than once this year.  At its lows earlier this month, Apple was down by more than a… Read More

The upcoming November election is shaping up to be an important and entertaining event. Investors are paying close attention, concerned about the impact the new president might have on the economy. But I believe no matter who wins in November, the incoming president will have limited impact on the economy and the stock market (at least at first). As we’ve seen in the past, presidential decisions can create confidence that leads to a bull market, or they can lead to a sense of malaise and a bear market. But it takes time for sentiment to develop and… Read More

The upcoming November election is shaping up to be an important and entertaining event. Investors are paying close attention, concerned about the impact the new president might have on the economy. But I believe no matter who wins in November, the incoming president will have limited impact on the economy and the stock market (at least at first). As we’ve seen in the past, presidential decisions can create confidence that leads to a bull market, or they can lead to a sense of malaise and a bear market. But it takes time for sentiment to develop and influence the market. The market can ignore the president for a time as traders find other things to focus on, like earnings or economic growth. #-ad_banner-#Right now, the economy is just too big to turn suddenly, and industries are too highly regulated for a new president to simply step in and make sweeping changes. After the election the new president will need time to enact policies, and it will take even more time before they really kick in. Overall, we probably have a year or more after the election to evaluate whether the president… Read More