Every stock investor has heard about the importance of diversification. In fact, I have emphasized many times in my articles just how critical being properly diversified is when managing a successful long-term portfolio. Diversification is not just critical for a long-term portfolio — it is the primary key for survival in the stock market. Massive bull markets, like the one taking place now, can have the negative effect of causing investors to become complacent, take too many risks, and… Read More

Every stock investor has heard about the importance of diversification. In fact, I have emphasized many times in my articles just how critical being properly diversified is when managing a successful long-term portfolio. Diversification is not just critical for a long-term portfolio — it is the primary key for survival in the stock market. Massive bull markets, like the one taking place now, can have the negative effect of causing investors to become complacent, take too many risks, and not diversify correctly. I know from experience that it is difficult not to go “all-in” on a hot stock. During the dot-com boom of the late 1990s, one Internet stock in particular just seemed to be going up day after day.#-ad_banner-# Noticing the uptrend, I decided to liquidate my portfolio and go all-in with this stock. Ignoring everything I knew about diversification, I used all of my capital and leverage, purchasing a large number of the… Read More

Exchange-traded funds (ETFs) have revolutionized the way investors approach the financial markets. No longer are multiple accounts required to access the majority of indexes, currencies… Read More

As any trader knows, investing in the stock market can be tricky. Many investors study past price charts and imagine how much money could… Read More

Consumers have an insatiable appetite for new and better products and services, and they tend to reward the companies that fulfill their desires. However, shifting consumer preferences can erode brand loyalty at even the best-loved companies. When this happens, expenses are slashed and dividends are cut as the formerly high-flying company struggles to remain relevant in the ever-changing consumer culture. Once the dividends start to be cut, yield investors will start to dump the stock,… Read More

Consumers have an insatiable appetite for new and better products and services, and they tend to reward the companies that fulfill their desires. However, shifting consumer preferences can erode brand loyalty at even the best-loved companies. When this happens, expenses are slashed and dividends are cut as the formerly high-flying company struggles to remain relevant in the ever-changing consumer culture. Once the dividends start to be cut, yield investors will start to dump the stock, sending share prices downward. The key to avoiding these “dividend trap” stocks is to look for a weakening fundamental and technical situation when the dividend yield is staying steady or climbing. Here are two stocks that may become “dividend traps” due to the changing consumer landscape. Garmin (Nasdaq: GRMN) This manufacturer and marketer of GPS equipment pays a hefty dividend yield of 5%. Generally, this would be a positive, but in this instance, it signals trouble.#-ad_banner-# The… Read More

On May 4, more than 30,000 investors descended upon downtown Omaha, Neb., to join the “Oracle of Omaha” at the annual Berkshire Hathaway shareholders meeting. Like a rock concert mixed with the evangelical zeal of true believers, this meeting has earned its label as the “Woodstock of capitalism.” Not bad for an event that started in 1982 with just 15 investors in an insurance company lunch room. Not only has the annual meeting expanded, but Berkshire Hathaway (NYSE: BRK-A) has grown exponentially to become the most expensive… Read More

On May 4, more than 30,000 investors descended upon downtown Omaha, Neb., to join the “Oracle of Omaha” at the annual Berkshire Hathaway shareholders meeting. Like a rock concert mixed with the evangelical zeal of true believers, this meeting has earned its label as the “Woodstock of capitalism.” Not bad for an event that started in 1982 with just 15 investors in an insurance company lunch room. Not only has the annual meeting expanded, but Berkshire Hathaway (NYSE: BRK-A) has grown exponentially to become the most expensive stock in the United States at more than $167,000 a share. Not to mention, the book value per share has increased an astounding nearly 600,000% over the history of the insurance conglomerate‘s lifetime. As Carla Pasternak, Chief Strategist of our High-Yield Investing newsletter, recently pointed out, Berkshire Hathaway shares don’t yield a dividend, even though the company’s holdings paid out $1.35 billion in dividends in the past… Read More

There’s a disaster just waiting to happen in America. No, I am not talking about a natural disaster, government collapse or anything like that. In fact, this is a subtle, slow-moving type of disaster that will catch many off guard. Even more will choose… Read More

We all know the ancient Greek legend of the phoenix, a giant and beautiful bird that rises from its ashes, renewed and stronger than ever. A few high-tech companies have experienced this same phenomenon. Apple (Nasdaq: AAPL) immediately comes to mind. Innovations like the iPhone and iPad transformed Apple from… Read More

Successful investors are a naturally curious breed, and the search for profit-producing investments can be a great outlet for high curiosity levels. Unfortunately, many investors are stymied by a one-track mindset, often because of past success in a particular area. For instance, I know… Read More

Banks have taken a beating since the collapse of the U.S. housing bubble. These financial institutions quickly became mere shadows of their past selves as unfettered lending practices, fueled by speculation and out-of-control greed, knocked the once-mighty companies to their knees.#-ad_banner-# The… Read More

My friend’s grandfather dabbled in real estate and land speculation nearly his entire life. He left a substantial amount of farmland to his heirs, but this land never appreciated much, wasn’t great for farming and didn’t produce… Read More