All major U.S. stock indices posted gains last week except for the Russell 2000, which lost 1.2% and is also the only major index in negative territory for 2014. Despite the weakness in small caps, the broader market, as measured by the S&P 500, has managed to rack up a decent 8.9% gain this year, largely on the back of technology issues. #-ad_banner-#The Nasdaq 100 is up 14.2% year to date. However, as I have been stating in this space for some time, if and when technology stocks stop leading, the broader market may be in… Read More

All major U.S. stock indices posted gains last week except for the Russell 2000, which lost 1.2% and is also the only major index in negative territory for 2014. Despite the weakness in small caps, the broader market, as measured by the S&P 500, has managed to rack up a decent 8.9% gain this year, largely on the back of technology issues. #-ad_banner-#The Nasdaq 100 is up 14.2% year to date. However, as I have been stating in this space for some time, if and when technology stocks stop leading, the broader market may be in for some significant problems over the near term. Dow Makes New High, but Problems Persist In last week’s Market Outlook, I warned that the early September new closing high in the Dow Jones Transportation Average had not yet been corroborated by a new closing high in the Dow Jones Industrial Average, which, according to Dow Theory, was a red flag for the overall market. That situation was averted last week by a new high in the industrials, clearing the way for more near-term strength in both indices. Read More

All major U.S. stock indices lost ground last week, led by the broad market S&P 500, which was down 1.1%. #-ad_banner-#​Halfway through the month, the market leading Nasdaq 100 (NDX) continues to stall just below formidable overhead resistance at 4,147, which I first discussed in the Aug. 25 Market Outlook. With the small-cap Russell 2000 the only major index in negative territory for the year, technology stocks have been responsible for market leadership. Without a significant and sustained rise above 4,147, or a strong surge higher by the… Read More

All major U.S. stock indices lost ground last week, led by the broad market S&P 500, which was down 1.1%. #-ad_banner-#​Halfway through the month, the market leading Nasdaq 100 (NDX) continues to stall just below formidable overhead resistance at 4,147, which I first discussed in the Aug. 25 Market Outlook. With the small-cap Russell 2000 the only major index in negative territory for the year, technology stocks have been responsible for market leadership. Without a significant and sustained rise above 4,147, or a strong surge higher by the Russell 2000 to pick up the slack, a broad market pullback is likely coming soon. All 10 sectors of the S&P 500 finished in negative territory for the week, led by energy, which was down 3.6%. My own metric based on ETF asset flows shows that the greatest outflow of sector-related assets over the past one-week, one-month and three-month periods was from the energy sector, which explains why it has been the weakest sector for each of these periods. Although my longer-term metrics suggest there will be an opportunity to buy energy-related assets in… Read More

Finding the right investment can be a challenge for anyone, especially during a down economy. But many don’t realize that the research has already been done for you.  #-ad_banner-#If you’ve read my articles, then you know I like to follow the big money players of the market — hedge funds. And right now, there is a good reason to keep a close eye on the latest trades by some of the major hedge funds. As… Read More

Finding the right investment can be a challenge for anyone, especially during a down economy. But many don’t realize that the research has already been done for you.  #-ad_banner-#If you’ve read my articles, then you know I like to follow the big money players of the market — hedge funds. And right now, there is a good reason to keep a close eye on the latest trades by some of the major hedge funds. As we head into the end of the year, hedge funds are feeling the pressure to create alpha — the market-beating returns for which they are known. The sector has had the worse year since 1997, with overall gains of more than 5% in the first nine months of 2012, compared with the S&P 500’s roughly 21% in the same period. Simply put, hedge funds are scrambling to achieve the typical performance that’s their claim to fame. This means some of these funds are especially focused on the stocks they think… Read More

Insider purchases — when a director or company executive buys shares — are some of the most closely followed events in the market. Who better knows whether a stock is overvalued or undervalued than someone with privileged access to the firm’s deals and daily business? While there are several reasons an insider might make smaller transactions that have less to do with their prospects on the company, it is rare that an insider would take a… Read More

Insider purchases — when a director or company executive buys shares — are some of the most closely followed events in the market. Who better knows whether a stock is overvalued or undervalued than someone with privileged access to the firm’s deals and daily business? While there are several reasons an insider might make smaller transactions that have less to do with their prospects on the company, it is rare that an insider would take a large stake without a solid reason for optimism.#-ad_banner-# And when an insider makes one of the biggest purchases in a decade… people stand up and take notice. James Grosfeld, former CEO of Pulte Homes (NYSE: PHM), has been on the board of directors of BlackRock (NYSE: BLK) one of the world’s largest private equity firms, since 1999. He invested $94 million for 500,000 shares of BlackRock in a series of transactions in October. Grosfeld now holds 700,538 shares worth $130 million with a… Read More

There are two primary techniques investors use to make profitable stock picks: fundamental and technical analysis.#-ad_banner-# One of the most time-tested methods is the technical analysis, which studies the stock price itself in an attempt to forecast future price moves. Technical analysts believe that all the fundamental information of a company is already reflected in its stock price. By studying price patterns and trading volume, technical analysts can determine the future direction of a stock. [Find out more about this type of analysis here.]… Read More

There are two primary techniques investors use to make profitable stock picks: fundamental and technical analysis.#-ad_banner-# One of the most time-tested methods is the technical analysis, which studies the stock price itself in an attempt to forecast future price moves. Technical analysts believe that all the fundamental information of a company is already reflected in its stock price. By studying price patterns and trading volume, technical analysts can determine the future direction of a stock. [Find out more about this type of analysis here.] Fundamental analysis, on the other hand, attempts to determine a stock’s future value by studying the actual condition of the company itself, the economy in which it operates and the overall market trends. It uses facts gleaned from the company’s own accounting, projections and outside economic data to build a picture of the company’s future. To successfully perform a fundamental analysis on a stock, investors should… Read More

It’s inevitable and undeniable that Apple’s (Nasdaq: AAPL) growth is slowing. In fact, a few years from now, sales of iPhones, iPads and other hardware could slow to single digits. Apple’s amazing growth   Fiscal year ends September Consider that Apple’s sales have grown at least 20% in eight of the past nine years. This amazing growth should happen again in the current fiscal year that began in October. But after that, Apple’s days of 20%-plus sales growth may be over. That’s what happens when a company’s revenue base starts to approach $200… Read More

It’s inevitable and undeniable that Apple’s (Nasdaq: AAPL) growth is slowing. In fact, a few years from now, sales of iPhones, iPads and other hardware could slow to single digits. Apple’s amazing growth   Fiscal year ends September Consider that Apple’s sales have grown at least 20% in eight of the past nine years. This amazing growth should happen again in the current fiscal year that began in October. But after that, Apple’s days of 20%-plus sales growth may be over. That’s what happens when a company’s revenue base starts to approach $200 billion.#-ad_banner-#   Make no mistake, boosting sales from under $10 billion in fiscal (September) 2004 to a projected $192 billion in the current year is the key factor behind Apple’s ever-rising stock price. But in the years ahead, it will be another factor that will help propel shares to fresh heights.   That factor: rising recurring revenue per user. We’ve known all along that Apple’s main goal was to seed the world with its hardware, so it can eventually sell software and services. The highly popular iTunes music… Read More

Technical analysis is the study of stock prices in an attempt to forecast future price movements. The discipline teaches that all relevant fundamental information is already embedded in the price, therefore, by following price charts, one can increase the odds of a successful investment. There are hundreds of indicators and tools a technical analyst can choose to perform a successful technical analysis, but only one stands out as my favorite.  #-ad_banner-#My favorite technical indicator When evaluating a stock, I often begin with… Read More

Technical analysis is the study of stock prices in an attempt to forecast future price movements. The discipline teaches that all relevant fundamental information is already embedded in the price, therefore, by following price charts, one can increase the odds of a successful investment. There are hundreds of indicators and tools a technical analyst can choose to perform a successful technical analysis, but only one stands out as my favorite.  #-ad_banner-#My favorite technical indicator When evaluating a stock, I often begin with Bollinger Bands. This technical indicator is a way to visually measure volatility by observing whether the price is high or low on a relative basis.  Created by John Bollinger in the early 1980s, the bands are built upon J.M. Hurst’s and Marc Chaikin’s trading band idea. Simply described, trading bands are moving averages that envelope price on a chart. John Bollinger took this simple concept and developed a statistically-based standard for the bands, designed easy-to-understand trading concepts around them and popularized their use.  All readily available technical analysis software have integrated Bollinger Bands. Read More

As I was perusing my morning news feed, I came across an appalling amount of headlines about the ever-dreaded ‘correction.’ While there is value in some of these articles, the majority provide no unique insight. Here’s how one should think about a possible correction: How do I spot a correction? How do I protect against losing my shirt in a downturn? And how do I properly implement any suggested strategy? First Question: How does one even know if a correction is coming? #-ad_banner-#The real answer: nobody really knows in which direction the market will… Read More

As I was perusing my morning news feed, I came across an appalling amount of headlines about the ever-dreaded ‘correction.’ While there is value in some of these articles, the majority provide no unique insight. Here’s how one should think about a possible correction: How do I spot a correction? How do I protect against losing my shirt in a downturn? And how do I properly implement any suggested strategy? First Question: How does one even know if a correction is coming? #-ad_banner-#The real answer: nobody really knows in which direction the market will go. Investors, companies and money managers alike merely hypothesize about the market’s future, but most agree that timing these events is more a function of luck than accurate prediction. In investing and psychology, we like clear guidance and definite action. So that poses a problem when a market pundit tells you “I don’t know.” I’ll go out on a limb and say it: I don’t know where the S&P will be next month or in a year. I hypothesize that markets are a bit long in the tooth and there are some bearish fundamentals that could lead the… Read More

Today, I’m going to tell you an unpleasant truth… The vast majority of investors won’t make much in their personal brokerage accounts this year… or next. Now this might make you angry. But don’t take my word for it, just look at a recent study done by investment-management giant BlackRock. Its study illustrates that the average investor does poorly when compared to the growth of other asset classes like stocks, bonds and oil. in fact, as you can see in the chart below, the average investor earns just 2.1% — below… Read More

Today, I’m going to tell you an unpleasant truth… The vast majority of investors won’t make much in their personal brokerage accounts this year… or next. Now this might make you angry. But don’t take my word for it, just look at a recent study done by investment-management giant BlackRock. Its study illustrates that the average investor does poorly when compared to the growth of other asset classes like stocks, bonds and oil. in fact, as you can see in the chart below, the average investor earns just 2.1% — below even the rate of inflation. I didn’t bring this up to poke fun. I want to point this out because the sooner we acknowledge that the individual investor generally fares poorly in stocks, the sooner we can begin to examine why and then take action to avoid some of the common mistakes made by most investors. For starters, let’s acknowledge a not-so-secret truth about the average investor — very few know anything about how to value a security. Most of the research or tips individual investors get come from either A.) Friends, family members or… Read More

The saying “one size fits all” is not tossed around in the world of investing very often…  and that’s for good reason. Risk appetites, investment horizons and financial goals mean portfolios can — and usually do — look different from person to person. Going a step further, each asset in those portfolios carry their own quirks that require tailored analysis. #-ad_banner-#​With the wide range of products trading on public exchanges these days, it’s important to know that a worthwhile metric in one industry may not reliably apply to the next. One shining example of… Read More

The saying “one size fits all” is not tossed around in the world of investing very often…  and that’s for good reason. Risk appetites, investment horizons and financial goals mean portfolios can — and usually do — look different from person to person. Going a step further, each asset in those portfolios carry their own quirks that require tailored analysis. #-ad_banner-#​With the wide range of products trading on public exchanges these days, it’s important to know that a worthwhile metric in one industry may not reliably apply to the next. One shining example of this is EPS, or earnings per share.  Many investors use EPS quarter after quarter to rate their holdings, but if you used that metric to value one industry in particular, you’d be way off base. Real estate investment trusts have been a cornerstone of my trading portfolio for years now.  While you may already be familiar with REITs and their inner workings, would you know how to properly value and compare them? Correct REIT appraisal centers on a key metric known as funds from operations, or FFO. Read More