The moment the market opens, my inbox gets flooded with alerts I’ve set up to notify me when a holding makes a big move, hits a stop-loss, releases important news, etc. The other week, I was inundated with messages telling me several of my holdings hit 52-week highs. In fact, in just one day, I received 11 different alerts of stocks hitting new highs. To a huge portion of the investing community, a stock hitting 52-week highs strikes a Pavlovian response… they immediately start thinking about selling. After all, one of the first… Read More

The moment the market opens, my inbox gets flooded with alerts I’ve set up to notify me when a holding makes a big move, hits a stop-loss, releases important news, etc. The other week, I was inundated with messages telling me several of my holdings hit 52-week highs. In fact, in just one day, I received 11 different alerts of stocks hitting new highs. To a huge portion of the investing community, a stock hitting 52-week highs strikes a Pavlovian response… they immediately start thinking about selling. After all, one of the first lessons investors are taught is to “buy low, sell high.” This can turn out to be a huge mistake. #-ad_banner-#Think about this… How many times have you made the mistake of selling a big winner way too early — right before that stock makes another big move in the days and weeks after you’ve sold? If you’re like so many investors, I suspect that the answer is more times than you care to admit. There’s more than just anecdotal evidence that proves the thesis that investors sell too early. A study done in 1997… Read More

Stock investors are no stranger to the concept of size. The evidence is well-documented that small companies tend to outperform their larger rivals. Since the bottom of the recession in 2009, the Russell 2000 index of small-cap stocks has jumped 196% against a return of 164% for stocks in the S&P 500. But does the same logic apply to master limited partnerships? As it turns out, size does matter, but now how you might think. Because MLPs play by a different set of rules than… Read More

Stock investors are no stranger to the concept of size. The evidence is well-documented that small companies tend to outperform their larger rivals. Since the bottom of the recession in 2009, the Russell 2000 index of small-cap stocks has jumped 196% against a return of 164% for stocks in the S&P 500. But does the same logic apply to master limited partnerships? As it turns out, size does matter, but now how you might think. Because MLPs play by a different set of rules than ordinary corporations, size affects them differently and creates an opportunity for investors that know how to spot the difference. One of the best ways to identify the size sweet spot is the cost of equity and debt. Since they distribute most of their cash flow to unitholders, they must constantly issue debt or equity to fund growth. By virtue of smaller economies of scale and more risk, smaller firms may not have access to cheap debt and may have to rely on revolving credit which is more expensive. Read More

If you’re a regular reader of Dividend Opportunities, you know I love getting — and reinvesting — dividend paychecks. Simply put, my goal is to earn a paycheck every day of the month by owning a basket of solid income securities — and then grow the size of those paychecks by harnessing the power of compounding through dividend reinvestment. So far, the results have been very rewarding. From an initial $200,000 investment, I’m earning $16,584 in dividends a year (or nearly $1,400 a month) using this strategy. And that doesn’t even include a penny from the healthy capital… Read More

If you’re a regular reader of Dividend Opportunities, you know I love getting — and reinvesting — dividend paychecks. Simply put, my goal is to earn a paycheck every day of the month by owning a basket of solid income securities — and then grow the size of those paychecks by harnessing the power of compounding through dividend reinvestment. So far, the results have been very rewarding. From an initial $200,000 investment, I’m earning $16,584 in dividends a year (or nearly $1,400 a month) using this strategy. And that doesn’t even include a penny from the healthy capital gains I’ve made from most of my holdings. But as I said, you may have already heard this before. My goal today is to show you how to get the most out of your income investments using a simple yet effective three-part strategy. #-ad_banner-#​I call it the “Dividend Trifecta,” and it’s the cornerstone of my Daily Paycheck Retirement Strategy. The great thing about the Dividend Trifecta is that it’s fully customizable to your own needs. You can use it to multiply your wealth over time, preserve capital — even bring in… Read More

In all my years in the market, I’ve never heard of such an incredible track record. The IPO prospectus from high-frequency trading firm Virtu Financial reveals that in the past four years, the company has lost money in exactly one of 1,238 trading sessions. J.P. Morgan didn’t have a single losing day in 2013. Bank of America notched a perfect performance of its own in the first quarter of 2013. #-ad_banner-#Clearly, Wall Street trades and invests its own money a lot differently than the “buy and hold” strategy it preaches to… Read More

In all my years in the market, I’ve never heard of such an incredible track record. The IPO prospectus from high-frequency trading firm Virtu Financial reveals that in the past four years, the company has lost money in exactly one of 1,238 trading sessions. J.P. Morgan didn’t have a single losing day in 2013. Bank of America notched a perfect performance of its own in the first quarter of 2013. #-ad_banner-#Clearly, Wall Street trades and invests its own money a lot differently than the “buy and hold” strategy it preaches to its clients. One of the best-kept secrets they use is selling options. Does that sound scary? Intimidating? If it does, there’s a very good reason for that: That’s exactly how Wall Street wants it. Wall Street works very hard to keep one of its most powerful income strategies out of the hands of regular investors. Because what most investors don’t realize is that selling puts isn’t just one of the most conservative options strategies… it’s one of the lowest-risk investment strategies in the entire market — more conservative than owning… Read More

Although the hedge fund industry attracts the best and the brightest, few fund managers are considered to be a “genius.” I think Baupost’s Seth Klarman deserves such accolades, and people like Warren Buffett and George Soros are inarguably brilliant. But the smartest manager in the business may be one that many have never heard of. I’m talking about Jim Simons. According to a recent glowing profile in the New York Times Simons:        — Received his doctorate at 23;         — Advanced code breaking for the National Security Agency at… Read More

Although the hedge fund industry attracts the best and the brightest, few fund managers are considered to be a “genius.” I think Baupost’s Seth Klarman deserves such accolades, and people like Warren Buffett and George Soros are inarguably brilliant. But the smartest manager in the business may be one that many have never heard of. I’m talking about Jim Simons. According to a recent glowing profile in the New York Times Simons:        — Received his doctorate at 23;         — Advanced code breaking for the National Security Agency at 26;         — Led a university math department at 30;         — Won geometry’s top prize at 37;         — And founded Renaissance Technologies, one of the world’s most successful hedge funds, at 44. At Renaissance, Simons has built a strong long-term track record, by deploying a massive amount of computing power to identify winning picks, known in the field as “quant investing.” Based on his recent stock buys, we have a pretty clear sense of what Simons’… Read More

Last month, I looked in disbelief at how quickly the media was to trumpet the “great” news of the job report for June. Here’s the first few lines of a CNN Money story I read when the news broke. The reporters seemed absolutely giddy:  The U.S. economy added 288,000 jobs in June, the Bureau of Labor Statistics (BLS) reported Thursday. That number beats economists’ expectations and comes along with other good news: Job growth was revised higher for both May and April. Along with CNN Money, most in the news media rejoiced.  Hot on the heels of a… Read More

Last month, I looked in disbelief at how quickly the media was to trumpet the “great” news of the job report for June. Here’s the first few lines of a CNN Money story I read when the news broke. The reporters seemed absolutely giddy:  The U.S. economy added 288,000 jobs in June, the Bureau of Labor Statistics (BLS) reported Thursday. That number beats economists’ expectations and comes along with other good news: Job growth was revised higher for both May and April. Along with CNN Money, most in the news media rejoiced.  Hot on the heels of a reported 2.9% contraction in the economy for the first quarter of the year, it was welcome news. And after a seemingly endless stretch of false economic starts and mixed job reports since 2009, this was a seemingly good sign of traction for the economy.  But here’s what the mainstream media didn’t tell you about those 288,000 jobs added…  Dig a little deeper into the Bureau of Labor Statistics’ June report and it details that there were 799,000 part-time jobs added in June, but a staggering 523,000 full-time jobs were lost.  You can see for yourself in… Read More

Today’s article is about “dumb money” vs. “smart money.” Some of what I’m about to tell you may come as no surprise to you… Some of it may shock you or make you a little uncomfortable…  But hopefully by the time you’re done reading today’s essay you’ll understand why it’s so important to have a firm grasp of why markets sometimes behave irrationally and how it causes so many investors to lose money. And perhaps more importantly, how to invest alongside the “smart money”… #-ad_banner-#But before I get to all that, let me share with you an interesting story that caught… Read More

Today’s article is about “dumb money” vs. “smart money.” Some of what I’m about to tell you may come as no surprise to you… Some of it may shock you or make you a little uncomfortable…  But hopefully by the time you’re done reading today’s essay you’ll understand why it’s so important to have a firm grasp of why markets sometimes behave irrationally and how it causes so many investors to lose money. And perhaps more importantly, how to invest alongside the “smart money”… #-ad_banner-#But before I get to all that, let me share with you an interesting story that caught my attention a few weeks ago. It’s about a little-known stock that gained a mind-numbing 23,000% in a matter of weeks. It’s the perfect illustration of the kind of insanity that routinely takes place in markets — especially when it’s continuously charging higher. And as I’ll explain in a moment, this kind of market madness certainly isn’t new.  The pinnacle of market-madness If you haven’t heard of Cynk Technology Corp, don’t feel bad. In fact, that’s probably a good thing. Only recently did the company begin to attract headlines in the financial media — and for all the wrong… Read More

Major U.S. indices closed mixed last week, with the broad-market S&P 500 and tech-heavy Nasdaq 100 closing higher and the blue-chip Dow industrials and small-cap Russell 2000 closing lower. The bigger takeaway to last week’s lack of direction is that the bellwether S&P 500 has been moving sideways for the past month and is essentially unchanged since July 1. #-ad_banner-#This recent loss of upward momentum suggests some distribution/profit-taking has been occurring and defines a near-term decision point in the index, bordered by 1,986 on the upside and 1,953 on the downside, from which its 2014 advance must resume if still… Read More

Major U.S. indices closed mixed last week, with the broad-market S&P 500 and tech-heavy Nasdaq 100 closing higher and the blue-chip Dow industrials and small-cap Russell 2000 closing lower. The bigger takeaway to last week’s lack of direction is that the bellwether S&P 500 has been moving sideways for the past month and is essentially unchanged since July 1. #-ad_banner-#This recent loss of upward momentum suggests some distribution/profit-taking has been occurring and defines a near-term decision point in the index, bordered by 1,986 on the upside and 1,953 on the downside, from which its 2014 advance must resume if still healthy and intact. Small Caps, Volatility Will Be Key Again This Week In the July 14 and July 21 Market Outlooks, I pointed out that the Russell 2000 and the Vanguard Small Cap Growth ETF (NYSE: VBK) were situated right on top of major support levels and amid favorable conditions to resume their 2014 advances — if they were still valid. Following initial rebounds, Friday’s sharp decline positioned both back on top of these levels — 1,143 on the Russell 2000 and $121.53 on VBK. A key determining factor of whether these support… Read More

All major U.S. indices closed lower last week, led by the Russell 2000, which collapsed 4%. This pushed the small-cap index back into negative territory for the year, although all other major indices are still positive for 2014. #-ad_banner-#Defensive utilities and consumer staples were the only sectors that posted gains last week. This, combined with the collapse in the Russell 2000 — which along with the tech-heavy Nasdaq typically leads the broader market both higher and lower — suggests that investor assets are making a subtle shift into safer places, perhaps in anticipation of an upcoming correction. Russell 2000 Fails… Read More

All major U.S. indices closed lower last week, led by the Russell 2000, which collapsed 4%. This pushed the small-cap index back into negative territory for the year, although all other major indices are still positive for 2014. #-ad_banner-#Defensive utilities and consumer staples were the only sectors that posted gains last week. This, combined with the collapse in the Russell 2000 — which along with the tech-heavy Nasdaq typically leads the broader market both higher and lower — suggests that investor assets are making a subtle shift into safer places, perhaps in anticipation of an upcoming correction. Russell 2000 Fails to Make New 2014 Highs In the June 30 Market Outlook, I pointed out that the Russell 2000 had broken overhead resistance at 1,137, clearing the way for a retest of the 1,213 March 4 high. The index tested 1,213 resistance as expected on July 1, but immediately failed there and has since collapsed back into underlying support at 1,150 to 1,139, which represents the index’s 50-day (minor trend proxy) and 200-day (major trend proxy) moving averages. This sets up a near-term decision point for the Russell, from which its November 2012 uptrend should aggressively… Read More

Investors saw some bullish fireworks as the Dow exploded past 17,000 for the first time last week just before they checked out to celebrate the Fourth of July. #-ad_banner-#The breaching of this psychologically significant threshold is quite a feat for a market that just five years ago was knocked silly by the worst economic downturn since the Great Depression. In fact, the Dow closed at 8,280.74 before Independence Day in 2009. That means that the Dow has more than doubled in five years. So far in 2014, the bull market has not only been in stocks, it’s also been in… Read More

Investors saw some bullish fireworks as the Dow exploded past 17,000 for the first time last week just before they checked out to celebrate the Fourth of July. #-ad_banner-#The breaching of this psychologically significant threshold is quite a feat for a market that just five years ago was knocked silly by the worst economic downturn since the Great Depression. In fact, the Dow closed at 8,280.74 before Independence Day in 2009. That means that the Dow has more than doubled in five years. So far in 2014, the bull market has not only been in stocks, it’s also been in bonds and commodities. This is an unusual situation, because usually when stock prices rise, bond prices falter, and/or commodity prices fall. Sure, stocks, bonds and commodities can move up together for short periods of time, but through the first half of 2014, all three asset classes are higher, which hasn’t occurred since 1993. In the first six months of 2014, the S&P 500 index rose 6.1%. Commodities, as measured by the PowerShares DB Commodity Index Tracking (NYSE: DBC), saw a year-to-date gain of 3.4%. And bonds, as measured by the iShares 20+ Year Treasury Bond (NYSE: TLT), spiked 11.5%.  The… Read More