As predictable as some market cycles are, they always seem to catch investors off guard. Mr. Market, senile old man that he is, just can’t seem to get past the euphoric buying around peaks and the panic selling around troughs. Smart investors know they don’t have to time a bottom perfectly. Sector leaders will always bounce back, and the wisest investors know how to pocket cash while they wait for a rebound. Some sectors are prone to extreme cycles. After a long period of high prices and capital investment, prices come crashing down and may take… Read More

As predictable as some market cycles are, they always seem to catch investors off guard. Mr. Market, senile old man that he is, just can’t seem to get past the euphoric buying around peaks and the panic selling around troughs. Smart investors know they don’t have to time a bottom perfectly. Sector leaders will always bounce back, and the wisest investors know how to pocket cash while they wait for a rebound. Some sectors are prone to extreme cycles. After a long period of high prices and capital investment, prices come crashing down and may take years to bottom. The best example of this is in agricultural commodities like corn and soybeans. Over the past 100 years, corn prices have peaked five times with the most recent at $8.54 per bushel in 2012. Each time it happened, prices soon plummeted as farmers planted as many acres as possible and supply went through the roof. Corn is now 55% off its 2012 highs, at $3.82 per bushel. Invariably, the drop in prices has led to a fall-off in planting and a drop in factors associated with increasing crop yields. And this, of course, takes a toll on… Read More

All major U.S. indices closed higher last week, logging the second week of strength following choppy trading since late August.  Last week’s rally was led by the small-cap Russell 2000, which is another positive sign. The index gained 4.6% through Friday’s close but is still down 3.3% for the year and lagging the other major averages. Broad market advances are typically led by the Russell 2000 and tech-heavy Nasdaq 100, the latter of which is the only major index still in positive territory for 2015. Recent strength in the energy sector is more good news, as it suggests a pickup… Read More

All major U.S. indices closed higher last week, logging the second week of strength following choppy trading since late August.  Last week’s rally was led by the small-cap Russell 2000, which is another positive sign. The index gained 4.6% through Friday’s close but is still down 3.3% for the year and lagging the other major averages. Broad market advances are typically led by the Russell 2000 and tech-heavy Nasdaq 100, the latter of which is the only major index still in positive territory for 2015. Recent strength in the energy sector is more good news, as it suggests a pickup in expectations for global economic growth. In last week’s Market Outlook, I pointed out that the biggest expansion in sector bet-related investor assets over the previous one-week and one-month periods was in energy, according to Asbury Research’s own ETF-based metric. These positive asset flows have already fueled an 8.4% rise in the energy sector in the past month, making it by far the strongest sector of the S&P 500. It has outperformed the broader market index by 4.7 percentage points during that time. As long as these positive asset flows continue, so should strength in energy-related stocks. Resilient European Market… Read More

A recent headline read “Study: Preschoolers Better at Figuring out How Gadgets Work than College Students.” At first, it had me scratching my head. But then I figured it out. Preschoolers were more open-minded. They were willing to think unconventionally to solve problems. The Wall Street Journal quoted the research team saying “the best and brightest college students acted as if the machine would always follow the common and obvious rule, even when we showed them how it might work.” That says a lot about human nature. Human beings build barriers to change. The older we get, the more close-minded… Read More

A recent headline read “Study: Preschoolers Better at Figuring out How Gadgets Work than College Students.” At first, it had me scratching my head. But then I figured it out. Preschoolers were more open-minded. They were willing to think unconventionally to solve problems. The Wall Street Journal quoted the research team saying “the best and brightest college students acted as if the machine would always follow the common and obvious rule, even when we showed them how it might work.” That says a lot about human nature. Human beings build barriers to change. The older we get, the more close-minded we become. This provides an important lesson for investing. The common and obvious rule is that buying stocks is a good way to build wealth. And while that’s certainly true to an extent, there’s an unconventional rule that applies more so than ever before in today’s market. But before I get into the details, consider this.  In a 2011 survey, securities broker TD Ameritrade found that more than three-quarters of “buy and hold” investors have never bought or sold stock options. The reasons? “Too risky,” according to a third of the respondents. A quarter of them said they “don’t need… Read More

Companies that went on a debt-fueled acquisition binge when times were good start scrambling to cover their interest payments. High-flying startups with little cash flow but terrific growth start to see investor sentiment come crashing down. #-ad_banner-#I’m not saying an end to the six-year bull market is coming soon, but investors may want to start looking for companies with the balance sheet health that will make it through lean times. I’ve found one industry that has seen strong, reliable cash flows that aren’t likely to stop soon — if ever. The Affordable Care Act Has Been A Cash Machine For… Read More

Companies that went on a debt-fueled acquisition binge when times were good start scrambling to cover their interest payments. High-flying startups with little cash flow but terrific growth start to see investor sentiment come crashing down. #-ad_banner-#I’m not saying an end to the six-year bull market is coming soon, but investors may want to start looking for companies with the balance sheet health that will make it through lean times. I’ve found one industry that has seen strong, reliable cash flows that aren’t likely to stop soon — if ever. The Affordable Care Act Has Been A Cash Machine For Healthcare Companies Passage of the Affordable Care Act (ACA) sent enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) soaring. These two programs provide coverage for low-income families that otherwise might not be able to afford it and is now subsidized under the ACA. Nationwide enrollment jumped 19% adding 11.2 million to the programs from the summer of 2013 to January of this year. States that implemented the ACA Medicaid expansion plan have seen even faster growth with a 26% jump in enrollments. The trend won’t end soon. Enrollment rates are still climbing and some states haven’t adopted… Read More

Investing is one of the most emotional activities a person can participate in. The psychological pulls and tugs on an investor throughout the process of buying, holding and selling stocks is exactly what makes it so intriguing. #-ad_banner-#You see, investors can turn on an individual stock or even a whole sector based on little more than a single negative news headline. Or, as we’ve seen over the last month, a single tweet by a person that isn’t even an elected official anymore can send a number of financially lucrative stocks far below their real intrinsic value. Today’s story began with… Read More

Investing is one of the most emotional activities a person can participate in. The psychological pulls and tugs on an investor throughout the process of buying, holding and selling stocks is exactly what makes it so intriguing. #-ad_banner-#You see, investors can turn on an individual stock or even a whole sector based on little more than a single negative news headline. Or, as we’ve seen over the last month, a single tweet by a person that isn’t even an elected official anymore can send a number of financially lucrative stocks far below their real intrinsic value. Today’s story began with the overnight profit grab — and subsequent viral rage seen online — by hedge fund manager-turned-drug company founder, Martin Shkreli’s. In September, Shkreli bought the rights to Daraprim, a drug that treats toxoplasmosis, an infection caused by a parasite, and promptly raised the price of the drug to $750 per pill, from just $13.50 — a 5,500% price hike. A few days after that, Democratic Presidential Candidate Hillary Clinton tweeted this: When you mix grandstanding political messages with a sector as large and profitable as Big Pharma, you’re going to get some overreactions on both sides. That’s exactly… Read More

There’s a good reason why professional sports are so popular.  The athletes that compete at the highest level are the best in the world; they’ve beaten improbable odds to play sports for a living. In fact, according to a recent study from USA Football — the governing body for amateur American football in the United States — approximately 310,465 seniors played high school football in 2013. That same year, only 254 men were drafted into the NFL — less than one out of every thousand. This is the standard I had in mind when I set out to invent a… Read More

There’s a good reason why professional sports are so popular.  The athletes that compete at the highest level are the best in the world; they’ve beaten improbable odds to play sports for a living. In fact, according to a recent study from USA Football — the governing body for amateur American football in the United States — approximately 310,465 seniors played high school football in 2013. That same year, only 254 men were drafted into the NFL — less than one out of every thousand. This is the standard I had in mind when I set out to invent a proprietary screening system that would allow me to profit no matter what the market climate was.  I wanted it to be so picky, so elite, that it would squeeze out most of the risks associated with investing. And so far, that screen has led me and my readers to collect profits on all 60 trades it has recommended. You see, the companies that pass this rigorous screen are the most elite in the world. They’ve also beaten improbable odds. According to Bloomberg, 80% of small businesses will fail within the first 18 months. That number jumps to 90% within five… Read More

Last month, airline stocks seemed to be on the verge of reversing their bearish 2015 trends. In fact, up until then, the entire transportation sector was still trapped in a disastrous decline, so airline strength offered the first ray of hope for the group all year. United Continental Holdings (NYSE: UAL) was a prime example of the attempted bullish reversal as it broke through the declining trendline from its January peak. The day of the breakout, the stock moved up more than 6% on heavy volume in a classic technical move. But just one week later,… Read More

Last month, airline stocks seemed to be on the verge of reversing their bearish 2015 trends. In fact, up until then, the entire transportation sector was still trapped in a disastrous decline, so airline strength offered the first ray of hope for the group all year. United Continental Holdings (NYSE: UAL) was a prime example of the attempted bullish reversal as it broke through the declining trendline from its January peak. The day of the breakout, the stock moved up more than 6% on heavy volume in a classic technical move. But just one week later, UAL was trading back below that trendline in an equally classic technical failure. The bulls seemed to flame out as demand withered. Shares began to fall under their own weight as whatever buyers there were could not absorb the supply offered for sale.   But this was more than a failure to hold a trendline breakout. It was also a failure to hold a breakout through the top of the May-to-September trading range, which is now likely to break to the downside. #-ad_banner-# In technical analysis, the more features that are broken to the upside on a breakout, the stronger… Read More

The bear market investors have been dreading is already here for many individual stocks. While the S&P 500 is down about 7% from the all-time high it achieved in May, roughly a fifth of the index’s components are well into bear territory, having plunged 20% or more from their peaks. #-ad_banner-#However, the selling has created value in many high-quality stocks, including some top dividend names with astonishingly long histories of rising payouts. A perfect example: the well-known replacement auto parts supplier Genuine Parts Co. (NYSE: GPC), with 59 straight years of dividend raises. The firm, best known for its NAPA… Read More

The bear market investors have been dreading is already here for many individual stocks. While the S&P 500 is down about 7% from the all-time high it achieved in May, roughly a fifth of the index’s components are well into bear territory, having plunged 20% or more from their peaks. #-ad_banner-#However, the selling has created value in many high-quality stocks, including some top dividend names with astonishingly long histories of rising payouts. A perfect example: the well-known replacement auto parts supplier Genuine Parts Co. (NYSE: GPC), with 59 straight years of dividend raises. The firm, best known for its NAPA stores, has seen its stock plummet nearly 25% from last December’s $109 peak. The selloff is an over-reaction to a relatively minor catalyst — a few quarters of mixed earnings reports stemming from strong dollar headwinds and transient bouts of inconsistent product demand. But this means one of history’s leading dividend aristocrats, a company that increases its dividend at least 25 consecutive years, is now attractively priced. How GPC Dominates In Auto Parts Last December, Genuine Parts was trading for around 23 times trailing 12-month earnings. Now the stock carries a much lower 18-times multiple,… Read More

For the past 40 years, this firm has become an elite source of income for investors, thanks in large part to the 543 consecutive monthly dividends it has paid. I’m willing to bet most of you have never heard of it. Yet the company I’m referring to has become the very definition of a monthly dividend-paying stock. It’s never missed a single one of its monthly dividends since 1969, shelling out more than $3.5 billion to shareholders during its 40+ year run. And that payout has increased 81 times during that span as well. I’m talking about Realty Income Corp… Read More

For the past 40 years, this firm has become an elite source of income for investors, thanks in large part to the 543 consecutive monthly dividends it has paid. I’m willing to bet most of you have never heard of it. Yet the company I’m referring to has become the very definition of a monthly dividend-paying stock. It’s never missed a single one of its monthly dividends since 1969, shelling out more than $3.5 billion to shareholders during its 40+ year run. And that payout has increased 81 times during that span as well. I’m talking about Realty Income Corp (NYSE: O). Despite this impressive and consistent track record, you may be wondering why you’ve never heard of the company before. That’s because Realty Income is a real estate investment trust (REIT).  The average investor on the street has probably never heard of this lucrative asset class, but it’s exactly the kind of off-the-radar investment I look for to deliver market-beating income in my premium advisory, High-Yield Investing.  You see, thanks to their unique structure, REITs are obligated by law to pass along 90% of their income to investors — in the form of dividends.  That means a company like… Read More