Most major indices finished lower for the second consecutive week. Only the small-cap Russell 2000 managed to eke out a 1.2% gain.  The U.S. markets were pressured by a number of factors. These included sharply rising long-term U.S. interest rates and worries of a debt default in Greece. Generally favorable U.S. economic data had investors concerned the Federal Reserve will begin raising short-term interest rates sooner rather than later. Another negative factor last week was generally declining global equity prices, which I’ll discuss in more detail later in the report.  At the sector level, only financials, consumer discretionary and industrials… Read More

Most major indices finished lower for the second consecutive week. Only the small-cap Russell 2000 managed to eke out a 1.2% gain.  The U.S. markets were pressured by a number of factors. These included sharply rising long-term U.S. interest rates and worries of a debt default in Greece. Generally favorable U.S. economic data had investors concerned the Federal Reserve will begin raising short-term interest rates sooner rather than later. Another negative factor last week was generally declining global equity prices, which I’ll discuss in more detail later in the report.  At the sector level, only financials, consumer discretionary and industrials finished in positive territory last week. Financials were driven by rising interest rates and a steepening yield curve that will help banks become more profitable. The weakest sector last week was utilities as rising interest rates lured yield-seeking investors out of this sector and into safer U.S. Treasuries.  Keep a Close Eye on Technology This Week  In last week’s Market Outlook, I discussed the importance of the 5,133 March 2000 tech bubble high in the Nasdaq Composite. I said, “Historic benchmark highs like this one are seldom appreciably and sustainably broken without at least a multiweek decline first.”  What I… Read More

I hate to say this, but as an investor the deck is stacked against you. There are literally tens of thousands of investments out there for you to choose between, each with their own market capitalization, earnings multiple, dividend yield and a whole host of other facts that dictate how they might perform. And given the set of infinite potential outcomes, the odds of successful investment sustained over time are likewise infinitesimal. Luckily though, my Game-Changing Stocks strategy can reverse the odds dramatically in your favor. In fact, it’s as close… Read More

I hate to say this, but as an investor the deck is stacked against you. There are literally tens of thousands of investments out there for you to choose between, each with their own market capitalization, earnings multiple, dividend yield and a whole host of other facts that dictate how they might perform. And given the set of infinite potential outcomes, the odds of successful investment sustained over time are likewise infinitesimal. Luckily though, my Game-Changing Stocks strategy can reverse the odds dramatically in your favor. In fact, it’s as close to a sure thing as anything I’ve ever seen. “Now, Andy,” I can just hear you respond, “of course you’d say that. It’s your strategy.” #-ad_banner-#But the truth is, the Game-Changing Stocks strategy isn’t really “mine.” It’s based on the work of an Italian mathematician named Vilfredo Pareto, who posited that 20% of all effort will yield 80% of the results. That’s why I preach letting 20% of your portfolio do the heavy lifting and capture all the big gains, while the remaining 80% sits in solid blue-chip investments earning you… Read More

Investors on the prowl for top-quality holdings typically seek two things: a history of robust dividends and the potential for substantially greater capital gains than the broader market. These qualities can be pretty tough to find in just one investment. Yet the WisdomTree MidCap Dividend ETF (NYSE: DON), an exchange-traded fund with net assets of $1.6 billion, offers both strong dividends and the potential for robust capital gains. Since its launch in June 2006, this ETF is up about 113% versus the S&P 500’s roughly 65% gain. The fund’s annualized dividend of $1.98 a share translates to a solid yield… Read More

Investors on the prowl for top-quality holdings typically seek two things: a history of robust dividends and the potential for substantially greater capital gains than the broader market. These qualities can be pretty tough to find in just one investment. Yet the WisdomTree MidCap Dividend ETF (NYSE: DON), an exchange-traded fund with net assets of $1.6 billion, offers both strong dividends and the potential for robust capital gains. Since its launch in June 2006, this ETF is up about 113% versus the S&P 500’s roughly 65% gain. The fund’s annualized dividend of $1.98 a share translates to a solid yield of 2.4%, compared with the S&P’s current yield of only 1.9%. DON’s track record stems from its bogey, the WisdomTree MidCap Dividend Index. This benchmark is made up of common stocks chosen from the top 75% of the WisdomTree Dividend Index (by market capitalization) after the removal of the 300 largest companies. To be included in the MidCap Dividend Index, a stock must meet certain requirements: Pay regular cash dividends during the 12 months before the index’s annual rebalance each December; have a market capitalization of at least $100 million as of the rebalance date; have an average daily… Read More

As I highlighted in a previous article, bad management teams can destroy shareholder wealth. Yet exemplary management teams can compound wealth for decades and make shareholders rich along the way. The 2008-2009 crisis showed us that in no other industry does management skill and discipline matter more than the financial sector. When financial companies make the news, it’s usually for the wrong reasons. I’ve found a pair of great companies that have stayed under the radar and are great stocks to own for decades.  The Travelers Companies, Inc. (NYSE: TRV) is a property and casualty insurer primarily focused on a… Read More

As I highlighted in a previous article, bad management teams can destroy shareholder wealth. Yet exemplary management teams can compound wealth for decades and make shareholders rich along the way. The 2008-2009 crisis showed us that in no other industry does management skill and discipline matter more than the financial sector. When financial companies make the news, it’s usually for the wrong reasons. I’ve found a pair of great companies that have stayed under the radar and are great stocks to own for decades.  The Travelers Companies, Inc. (NYSE: TRV) is a property and casualty insurer primarily focused on a commercial client base. Nonetheless, a third of its business is home and auto insurance for individuals. What makes Travelers special is its tremendous performance in the most important metric for evaluating insurance companies, the combined ratio. The combined ratio answers whether the company is adequately compensated for the risk it is taking and whether the company is operating efficiently. The ratio measures how much income generated from insurance premiums goes to pay operating expenses and customer claims. A combined ratio under 100% indicates an underwriting profit, and a ratio over 100% indicates an underwriting loss. Insurance companies can still earn… Read More

These seven stocks have done the impossible. Each one of them has paid a dividend like clockwork for over a century. In fact, the longest-standing dividend payer on the list hasn’t missed a payment since 1877 — when Rutherford B. Hayes was president. #-ad_banner-#Think of everything that has happened to our financial system since that time: World War I and II, The Great Depression, the dot-com bubble, government shutdowns, the list goes on. For the seven stocks I’m about to show you, none of this seemed to matter. These companies breezed through every economic downturn America has ever faced without… Read More

These seven stocks have done the impossible. Each one of them has paid a dividend like clockwork for over a century. In fact, the longest-standing dividend payer on the list hasn’t missed a payment since 1877 — when Rutherford B. Hayes was president. #-ad_banner-#Think of everything that has happened to our financial system since that time: World War I and II, The Great Depression, the dot-com bubble, government shutdowns, the list goes on. For the seven stocks I’m about to show you, none of this seemed to matter. These companies breezed through every economic downturn America has ever faced without so much as a hiccup in their dividend payments. In fact, most of them were able to increase their payouts during those periods. That’s a pretty remarkable feat. In 2009 alone, more than 800 American companies had to cut their dividends because of the fallout from the subprime crisis. Now, to be fair, there is nothing secret about these stocks. You’ve probably heard of all these companies before. But to me, that’s not a deterrent. In fact, it’s part of what makes these seven stocks so attractive. That’s because in all my years of investing, I’ve found that it’s not… Read More

Over the past few decades, we’ve seen many advances in how the stock market functions. Today, exchanges and brokerage houses exist almost entirely online, and everyone is competing for microseconds of speed. We’ve also seen the idea of “investing” evolve into something much more advanced and complicated than it was in the early days. I’ve spent my entire 18-year career immersed in the finance world. And in my experience, no matter what data, methods, techniques, witchcraft, mojo or voodoo you choose to use for your investments, it is absolutely critical that you understand what you’re doing. If not, you’re just… Read More

Over the past few decades, we’ve seen many advances in how the stock market functions. Today, exchanges and brokerage houses exist almost entirely online, and everyone is competing for microseconds of speed. We’ve also seen the idea of “investing” evolve into something much more advanced and complicated than it was in the early days. I’ve spent my entire 18-year career immersed in the finance world. And in my experience, no matter what data, methods, techniques, witchcraft, mojo or voodoo you choose to use for your investments, it is absolutely critical that you understand what you’re doing. If not, you’re just another amateur grasping for success. The truth is, today’s “game” requires an increased arsenal of tactics and methods to prosper. And for the average investor, a powerful options strategy is one tool that should be used. #-ad_banner-# Options can be as simple or as complicated as you want to make them. Just know that when you purchase options as a means to speculate on future stock price movements, you are limiting your downside risk, yet your profit potential can be unlimited. Aside from speculation, investors use options for hedging purposes. It is a way to… Read More

Over the past few decades, we’ve seen many advances in how the stock market functions. Today, exchanges and brokerage houses exist almost entirely online, and everyone is competing for microseconds of speed. We’ve also seen the idea of “investing” evolve into something much more advanced and complicated than it was in the early days. I’ve spent my entire 18-year career immersed in the finance world. And in my experience, no matter what data, methods, techniques, witchcraft, mojo or voodoo you choose to use for your investments, it is absolutely critical that you understand what… Read More

Over the past few decades, we’ve seen many advances in how the stock market functions. Today, exchanges and brokerage houses exist almost entirely online, and everyone is competing for microseconds of speed. We’ve also seen the idea of “investing” evolve into something much more advanced and complicated than it was in the early days. I’ve spent my entire 18-year career immersed in the finance world. And in my experience, no matter what data, methods, techniques, witchcraft, mojo or voodoo you choose to use for your investments, it is absolutely critical that you understand what you’re doing. If not, you’re just another amateur grasping for success. The truth is, today’s “game” requires an increased arsenal of tactics and methods to prosper. And for the average investor, a powerful options strategy is one of those tools that should be used. #-ad_banner-#I realize some of you may have never considered using options in your own portfolio. That’s OK. I want to use today’s essay to explain some of the basics and demystify options so that you can use them to amplify your profit potential and limit the downside. Read More

Great companies typically have two things in common:  One is a clearly defined, best-in-class portfolio of products or services that’s leveraged into industry-leading market share and profits. The other is the ability to know when it’s time to begin re-inventing the business model to avoid stagnation. By this definition, the management consulting, IT services and outsourcing giant Accenture Plc (NYSE: ACN) is a great company. Founded in 1989 (after a name change from Arthur Anderson Consulting), Accenture has evolved into an industry leader. Thanks to proven expertise in dozens of industries, the firm does business with three-quarters of the domestically-focused… Read More

Great companies typically have two things in common:  One is a clearly defined, best-in-class portfolio of products or services that’s leveraged into industry-leading market share and profits. The other is the ability to know when it’s time to begin re-inventing the business model to avoid stagnation. By this definition, the management consulting, IT services and outsourcing giant Accenture Plc (NYSE: ACN) is a great company. Founded in 1989 (after a name change from Arthur Anderson Consulting), Accenture has evolved into an industry leader. Thanks to proven expertise in dozens of industries, the firm does business with three-quarters of the domestically-focused companies in the S&P 500. It has a large global footprint, too, with operations in 120 countries. Since 2010, annual revenues have risen by more than 40% to almost $33 billion and earnings are up nearly 80% to $4.71 per share. In the nine years since it initiated a dividend, Accenture increased its payout nearly seven-fold, to $2.04 a share. Shareholders have also enjoyed outsized capital gains. However, Accenture’s traditional businesses are fairly mature, portending  a substantially slower pace of expansion in coming years. Accenture is already adapting, though, by moving aggressively into one of the highest-growth… Read More

I want to share a little-known but powerful indicator with you today. To paraphrase hockey legend Wayne Gretzky, this indicator helps us skate to where the puck is going to be, not where it has been. In other words, we can use it to identify and anticipate strength and weakness in markets and specific sectors. This indicator is a graphical illustration of relative strength (RS). Regular readers know RS is a quantitative measure of trend strength and one of the most powerful tools available to traders. Study after study shows that outperforming stocks tend to continue to outperform, and we… Read More

I want to share a little-known but powerful indicator with you today. To paraphrase hockey legend Wayne Gretzky, this indicator helps us skate to where the puck is going to be, not where it has been. In other words, we can use it to identify and anticipate strength and weakness in markets and specific sectors. This indicator is a graphical illustration of relative strength (RS). Regular readers know RS is a quantitative measure of trend strength and one of the most powerful tools available to traders. Study after study shows that outperforming stocks tend to continue to outperform, and we have used high RS to find stocks that returned up to 242% in a year. Typically, most people compare performance between financial instruments by measuring percentage changes. The following graph shows the performance of a few of the major U.S. equity indices over the past 10 weeks: Here you can see the tech-heavy Nasdaq is leading the fray with the broad-market NYSE Composite a close second. The natural resource-heavy AMEX is in third, and the blue-chip Dow industrials and small-cap Russell 2000 are bringing up the rear. That’s all the information you can really… Read More