If you Google the phrase, “is the stock market overpriced,” you’ll get more than 600,000 hits on how the market is ready to fall off a cliff. That search will find you article after article comparing today’s market to 1999 and even 1929. #-ad_banner-#Several articles try convincing their readers that the market is as much as 80% overvalued — as if that statement has any real meaning. Others say prudent investors should stay away from the stock market after it hits a new high. They reason that the market must revert to some mean level before it can sustain a… Read More

If you Google the phrase, “is the stock market overpriced,” you’ll get more than 600,000 hits on how the market is ready to fall off a cliff. That search will find you article after article comparing today’s market to 1999 and even 1929. #-ad_banner-#Several articles try convincing their readers that the market is as much as 80% overvalued — as if that statement has any real meaning. Others say prudent investors should stay away from the stock market after it hits a new high. They reason that the market must revert to some mean level before it can sustain a move higher. On that, I call BS. Here’s why… It turns out that, historically, the best time to buy stocks is after a new 12-month high as opposed to a new 12-month low. Now this may seem illogical or counterintuitive. After all, you’d think the market would have more upside potential after hitting a new low than a new high. But I have 90-years of data to prove that hypothesis incorrect. You see, the historical record going back to 1928 shows that stocks perform 160% better after hitting an all-time new high. Take a look at the chart below. The… Read More

One of the hallmarks of America is the near-universal belief that our nation is the land of opportunity. Despite the many problems in our country, we’ve always believed that our children would be better off than we were. #-ad_banner-#And for the better part of two centuries, that was true. But in the minds of many Americans today, that belief is dying… You see, more than 56% of Americans believe their children will be worse off financially than they are. Now, that’s an improvement from a similar survey in 2014, which found that 76% of parents feared for their children’s futures. Read More

One of the hallmarks of America is the near-universal belief that our nation is the land of opportunity. Despite the many problems in our country, we’ve always believed that our children would be better off than we were. #-ad_banner-#And for the better part of two centuries, that was true. But in the minds of many Americans today, that belief is dying… You see, more than 56% of Americans believe their children will be worse off financially than they are. Now, that’s an improvement from a similar survey in 2014, which found that 76% of parents feared for their children’s futures. But that still means that almost 60% of parents don’t think their children will achieve any lasting financial success. And that number is sure to grow as the United States edges ever closer to a financial abyss. This begs the question: Are these parents being overly pessimistic, or do their concerns have merit? Like many such questions, the truth lies somewhere in the middle. But being proactive against the threats to our kid’s futures is a sure-fire way to secure their financial well-being. Take Social Security for instance. Social Security was instituted by Franklin Roosevelt in 1935 as a tool… Read More

Major U.S. indices advanced modestly last week, with most tacking on 0.5% or less. This suggests expectations for lower corporate taxes and fewer regulations from a Trump presidency may be fully priced into the market.  If this is indeed the case, I believe it will open the door for a period of seasonal weakness during the first quarter, similar to the one we saw last year, which resulted in an almost 19% decline in the broader market S&P 500 from the Dec. 29 high to the Feb. 11 low. #-ad_banner-#From a sector standpoint, the market was essentially split down the… Read More

Major U.S. indices advanced modestly last week, with most tacking on 0.5% or less. This suggests expectations for lower corporate taxes and fewer regulations from a Trump presidency may be fully priced into the market.  If this is indeed the case, I believe it will open the door for a period of seasonal weakness during the first quarter, similar to the one we saw last year, which resulted in an almost 19% decline in the broader market S&P 500 from the Dec. 29 high to the Feb. 11 low. #-ad_banner-#From a sector standpoint, the market was essentially split down the middle last week, indicating investor indecision. Financials, technology, industrials and utilities outperformed the S&P 500, while real estate, materials, health care, energy, and consumer discretionary underperformed.  Keep Watching Overhead Resistance In last week’s Market Outlook, I pointed out that the Dow Jones Transportation Average was testing major overhead resistance at its 9,310 November 2014 high. I said that as long as this level continued to hold, it suggested the correction I’ve been expecting may finally be beginning. This week’s first chart shows the NYSE Composite also recently tested and failed to break overhead resistance at its 11,255 May 2015… Read More

2016 has been a great year to be a stock market investor. All the major indexes have moved solidly higher, providing profits for short-term traders and long-term investors alike. Dark, bearish fears of the regulatory regime change have been proven wrong as the indexes accelerate on the upside. There is even a chance for the DJIA to break 20,000 before 2017, an unthinkable accomplishment just a few months ago. Thanks to the monster bull market of 2016, nearly everyone is sitting on substantial profits as the year winds down. I can feel the excitement and anticipation whenever I speak with… Read More

2016 has been a great year to be a stock market investor. All the major indexes have moved solidly higher, providing profits for short-term traders and long-term investors alike. Dark, bearish fears of the regulatory regime change have been proven wrong as the indexes accelerate on the upside. There is even a chance for the DJIA to break 20,000 before 2017, an unthinkable accomplishment just a few months ago. Thanks to the monster bull market of 2016, nearly everyone is sitting on substantial profits as the year winds down. I can feel the excitement and anticipation whenever I speak with my fellow investors. The optimism and positive energy are truly off the charts wherever stock market investors gather. One thing that I have noticed is that many investors are so excited about their success, they forget about the taxes due by April 15. Investors of all types still must return a portion of their gains to Uncle Sam come Tax Day.  And some will be shocked at the amount owed! The good news is that there are several legal ways to mitigate your 2016 federal tax bill. Before we get started, it is critical to note that I am not… Read More

Stock investors have truly been blessed in 2016. The major averages have been rocketing higher despite dire predictions of a crash due to the uncertainty revolving around the current president-elect. Rather than dropping on this uncertainty, stocks have embraced the pro-business and nationalistic stance of the pending administration with an incredible vigor. But it poses the question: Is this the end of the bull market? To answer this vexing question, I decided to take a close look at the most popular stock market barometer for answers. What I discovered was surprising. While no one knows for certain what the future… Read More

Stock investors have truly been blessed in 2016. The major averages have been rocketing higher despite dire predictions of a crash due to the uncertainty revolving around the current president-elect. Rather than dropping on this uncertainty, stocks have embraced the pro-business and nationalistic stance of the pending administration with an incredible vigor. But it poses the question: Is this the end of the bull market? To answer this vexing question, I decided to take a close look at the most popular stock market barometer for answers. What I discovered was surprising. While no one knows for certain what the future holds, my research reveals that the bull market could easily last another two or more years. What Has Happened So Far? At the time of this writing, the Dow Jones Industrial Average (DJIA) has pushed another 100 points higher into the 19,900 area. Early in 2016, the DJIA hit a low in the 15,450 zone on pre-election jitters. Since that time, this index, affectionately known as the stock market barometer, has added over 14% in a steady climb higher. In the short time since the election, the index has risen by over 8%. #-ad_banner-#These figures mean that the DJIA… Read More

Legendary investor John Templeton had a simple explanation for the cycle of bull markets, saying they are “born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” At 2,800-plus days and counting, the current bull market, which was born from the ashes of the 2008-2009 financial crises and has been the second-longest in history, seems to be exiting the skepticism stage and entering the optimism stage. Longtime subscribers of my premium investing service, Maximum Profit, know that I was very skeptical of how much longer the bull market would last at the beginning of the year. I… Read More

Legendary investor John Templeton had a simple explanation for the cycle of bull markets, saying they are “born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” At 2,800-plus days and counting, the current bull market, which was born from the ashes of the 2008-2009 financial crises and has been the second-longest in history, seems to be exiting the skepticism stage and entering the optimism stage. Longtime subscribers of my premium investing service, Maximum Profit, know that I was very skeptical of how much longer the bull market would last at the beginning of the year. I cited slow economic growth, declining earnings in S&P 500 companies’ earnings, and the fact that my proprietary momentum-based investing system was finding very few companies that had the cash flow growth  needed to warrant a “buy” signal under my system’s rules. —Sponsored Link— New Gold Law To Impact 1.6 Billion People A new global law in effect this December could deliver an unexpected shock to the markets. No less than 32 major central banks are scrambling to prepare for the inevitable fallout. They’re shifting their money into one single asset that could explode in value,… Read More

The post-election rally stalled last week, following the prior week’s big advance. While most major U.S. indices closed relatively unchanged, the small-cap Russell 2000 was the exception. After hitting a high of 1,393 on Dec. 9, essentially meeting the 1,400 upside target I initiated in June, the index fell 1.7% last week. #-ad_banner-#Interestingly, all sectors of the S&P 500 finished last week in negative territory except for health care (+1.1%), utilities (+0.9%) and consumer staples (+0.02%), which are all defensive sectors. This was a complete reversal of the previous week’s broad-based rally. This internal weakness warns that a deeper decline… Read More

The post-election rally stalled last week, following the prior week’s big advance. While most major U.S. indices closed relatively unchanged, the small-cap Russell 2000 was the exception. After hitting a high of 1,393 on Dec. 9, essentially meeting the 1,400 upside target I initiated in June, the index fell 1.7% last week. #-ad_banner-#Interestingly, all sectors of the S&P 500 finished last week in negative territory except for health care (+1.1%), utilities (+0.9%) and consumer staples (+0.02%), which are all defensive sectors. This was a complete reversal of the previous week’s broad-based rally. This internal weakness warns that a deeper decline may be coming between now and early next year. Another Sign The Market Is Too Complacent In last week’s Market Outlook, I discussed the potential for an additional 3% rise in the Dow Jones Industrial Average to 20,400 before historically weak January/February seasonality kicks in. But I also pointed out that the market remains too complacent, according to the Volatility S&P 500 (VIX), for it to go much higher without a pullback first. This week’s first chart shows that put-to-call ratios are corroborating the extreme complacency in the VIX. The lower panel plots the 5-day moving average of the… Read More

For the past few weeks, I’ve been telling readers about the exciting opportunities that have recently opened up for regular, average investors to own a stake in some of the most innovative companies in the world before they issue shares on the major exchanges. And while an initial public offering (IPO) is the Holy Grail for early-stage investors, often fetching multiples of many times your investment and higher, acquisitions are by far the most common exit. In my years of experience of being involved in the pre-IPO world, investor exits by acquisition make up about two-thirds of exits. That makes… Read More

For the past few weeks, I’ve been telling readers about the exciting opportunities that have recently opened up for regular, average investors to own a stake in some of the most innovative companies in the world before they issue shares on the major exchanges. And while an initial public offering (IPO) is the Holy Grail for early-stage investors, often fetching multiples of many times your investment and higher, acquisitions are by far the most common exit. In my years of experience of being involved in the pre-IPO world, investor exits by acquisition make up about two-thirds of exits. That makes the ability to analyze what makes a good acquisition target critical to your success as an early-stage investor. This isn’t an aptitude you’re born with, but it’s a skill you can learn. It’s a technique I’ve picked up in almost ten years working with venture capital firms and angel investors to find the best new startups. —Recommended Link— 96% Of Americans Are Missing Out On This Few people realize it, but the IRS offers a program that can eliminate your taxes in retirement. This escape clause is open to anyone. All you have to do is file a one-page… Read More

In the first part of this article, I highlighted two main aspects of the investment research that — if used correctly — can maximize investors’ time when scouring for quality companies in which to invest. The first rule I outlined is the simple fact that an investor shouldn’t attempt to follow everything. The second is that you should keep company relationships — such as supplier-customer and competitor relationships — in mind when analyzing a stock. With these two established rules in hand, we are now ready to cast our net into the market to attempt to reel in possible investment… Read More

In the first part of this article, I highlighted two main aspects of the investment research that — if used correctly — can maximize investors’ time when scouring for quality companies in which to invest. The first rule I outlined is the simple fact that an investor shouldn’t attempt to follow everything. The second is that you should keep company relationships — such as supplier-customer and competitor relationships — in mind when analyzing a stock. With these two established rules in hand, we are now ready to cast our net into the market to attempt to reel in possible investment candidates that will fit nicely in our portfolios. Research Rule No. 3: Learn to Discriminate While we’re primarily looking for good fits, it’s just as important to know the companies we don’t want in our portfolios. In essence, the investor must learn to discriminate between companies that are “good,” “great” and “outstanding.” And inversely, we must identify the difference between “bad,” “terrible” and “horrific.” #-ad_banner-#Of course, there are more technical descriptions than the ones above that can be used to describe and categorize certain companies. But the point is, it’s important to have a process when deciding on the… Read More

Editor’s Note: Before you get to this week’s Market Outlook, there is a two-part investment strategy that has delivered extra payouts of $365, $520, $700 and even $1,000 to investors in addition to dividends and capital gains. The next payout could be worth as much as $500, and it’s available in the next 48 hours. Of course, there are a few restrictions, but it’s highly likely you qualify for this program. To see if you qualify for it, click here. After a one-week breather, the U.S. stock market resumed its post-election romp last week, with many… Read More

Editor’s Note: Before you get to this week’s Market Outlook, there is a two-part investment strategy that has delivered extra payouts of $365, $520, $700 and even $1,000 to investors in addition to dividends and capital gains. The next payout could be worth as much as $500, and it’s available in the next 48 hours. Of course, there are a few restrictions, but it’s highly likely you qualify for this program. To see if you qualify for it, click here. After a one-week breather, the U.S. stock market resumed its post-election romp last week, with many indices setting new all-time highs. The rally was led by the small-cap Russell 2000 (5.6%) and tech-heavy Nasdaq 100 (3.3%).   The advance was driven by expectations that a Trump presidency will be extremely favorable to U.S. businesses, with the loosening of government regulations and dismantling of Dodd-Frank being two expected changes. Last week’s rally was about as broad-based as they come. Every sector of the S&P 500 ended the week deep in positive territory, led by financials (4.9%), technology (4.2%) and real estate (3.8%).   Dow Industrials Closing In On 20,400 Target In last week’s Market Outlook, I… Read More