If you’d like us to answer one of your investing questions in our weekly Ask The Expert Q&A column, email us at editors@investinganswers.com. (Note: We will not respond to requests for stock picks.) Question: When’s the best time of year to invest? –Valerie V., Seattle Investors have become well acquainted with the phrase “Sell in May and go away,” which suggests that stocks only generate… Read More

If you’d like us to answer one of your investing questions in our weekly Ask The Expert Q&A column, email us at editors@investinganswers.com. (Note: We will not respond to requests for stock picks.) Question: When’s the best time of year to invest? –Valerie V., Seattle Investors have become well acquainted with the phrase “Sell in May and go away,” which suggests that stocks only generate gains until Memorial Day, after which they slip in value before rising again after Labor Day. Is this axiom on the mark, or is it a myth? Well, in an analysis of 100 years’ worth of monthly returns, Bespoke Investment Research couldn’t find any such trend. The Dow Jones Industrial Average (DJIA) rose 0.37% on average every June, 1.39% each July, and 1.01% every August. Then again, the market tends to modestly rise in most months, with February… Read More

Risk equals reward, right? This has been an investment concept for more than a century. The notion implies that every asset class delivers gains that account for their volatility and risk. Bonds (which have default risk) generate modestly better returns than cash, large-cap stocks have delivered better returns than bonds over the long haul, and small-cap stocks,… Read More

Risk equals reward, right? This has been an investment concept for more than a century. The notion implies that every asset class delivers gains that account for their volatility and risk. Bonds (which have default risk) generate modestly better returns than cash, large-cap stocks have delivered better returns than bonds over the long haul, and small-cap stocks, the riskiest asset class of all, are expected to generate the best returns of all, at least for investors who can stomach the wild swings. But is the adage really true? Are you really compensated for risk with better returns? The answer may surprise you. To see whether you are taking on too much risk in search of rewards, let’s turn to Stanford University professor William Sharpe, who devised a handy measure of risk-adjusted returns back in the 1960s. His “Sharpe ratio” is used… Read More

After a volatile few months, interest rates appear to be settling back into a tight trading range, For example, the yield on the 10-year U.S. Treasury has hovered between 2.5% and 2.7% for more than a month now, after a stunning surge in May… Read More

Did you miss out on the recent hot IPOs for Noodles & Co. (Nasdaq: NDLS), Fairway Group Holdings (NYSE: FWM) and Stemline Therapeutics (Nasdaq: STML)?#-ad_banner-# Well, the hits keep on coming. Phillips 66 Partners (Nasdaq: PSXP), which was one of the looming initial public offerings that I profiled last week, surged a hefty 30% in its first day of trading. If you missed out on these fast starters, fret not. Many other recent IPOs haven’t fared nearly as well from their initial… Read More

Did you miss out on the recent hot IPOs for Noodles & Co. (Nasdaq: NDLS), Fairway Group Holdings (NYSE: FWM) and Stemline Therapeutics (Nasdaq: STML)?#-ad_banner-# Well, the hits keep on coming. Phillips 66 Partners (Nasdaq: PSXP), which was one of the looming initial public offerings that I profiled last week, surged a hefty 30% in its first day of trading. If you missed out on these fast starters, fret not. Many other recent IPOs haven’t fared nearly as well from their initial IPO price as these big gainers. IPOs sometimes need to simmer for a bit as investors only belatedly get around to checking them out.  Here’s a quick look at what the hot money may have initially missed but far-sighted investors may soon start snapping up. 1. Esperion Therapeutics (Nasdaq: ESPR) Thanks to the blockbuster success of Lipitor and other statins, the cholesterol-fighting market has always been seen as a great prize for drug companies. Billions in sales await any drug… Read More

Even as Europe struggles to avoid further meltdowns, the economic pulse across the English Channel is starting to quicken. A steady drumbeat of positive economic reports has led to expectations that much better days lie ahead in 2014 and 2015 for the U.K. economy. Meanwhile, British stock prices, which have failed to keep pace with their U.S. counterparts, are starting to emerge as timely bargains. Green Shoots Back in 2010 and 2011, U.S. economists started to notice signs of… Read More

Even as Europe struggles to avoid further meltdowns, the economic pulse across the English Channel is starting to quicken. A steady drumbeat of positive economic reports has led to expectations that much better days lie ahead in 2014 and 2015 for the U.K. economy. Meanwhile, British stock prices, which have failed to keep pace with their U.S. counterparts, are starting to emerge as timely bargains. Green Shoots Back in 2010 and 2011, U.S. economists started to notice signs of life among both manufacturers and consumers, citing a rising tide of “green shoots” that popped up from the soil. That early evidence of a moderate recovery in the U.S. eventually led to robust share price gains across all U.S. asset classes. Fast-forward to 2013, and the same playbook appears to be emerging in the U.K. For example: After shrinking 0.2% in the fourth quarter of 2012, the U.K. economy grew 0.3% sequentially in the first quarter of 2013, and grew a further 0.6% in the second quarter. Read More

To paraphrase the 17th-century philosopher Thomas Hobbes, the tenure of a corporate executive can be “nasty, brutish and short.” Indeed, many CEOs and chief financial officers last just a few years on the job before the board decides that fresh blood is needed. Most of the time, such a transition appears to be orderly, but when an abrupt change is made, you should almost always move quickly to sell shares. There’s a very good chance that you’ll be able to buy back shares at a much better price down the road, for reasons… Read More

To paraphrase the 17th-century philosopher Thomas Hobbes, the tenure of a corporate executive can be “nasty, brutish and short.” Indeed, many CEOs and chief financial officers last just a few years on the job before the board decides that fresh blood is needed. Most of the time, such a transition appears to be orderly, but when an abrupt change is made, you should almost always move quickly to sell shares. There’s a very good chance that you’ll be able to buy back shares at a much better price down the road, for reasons I’ll explain in a moment. Scandal In The Grocery Aisle After a series of stumbles, including a botched deal to buy Pringles potato crisps and allegations of price-fixing of in the walnut market, several executives at Diamond Foods (Nasdaq: DMND) were abruptly terminated in February 2012. Shares suddenly collapsed by two-thirds from prices seen just a few months earlier, leading some investors to start to bottom-feed this stock in search of value. Such buying turned out to be premature, as Diamond Foods’ problems only deepened from there,… Read More

How does a company worth $60 billion manage to completely shock investors and deliver a 25% one-day gain? That’s the question being asked at traders’ desks across the country after Facebook delivered a rock-solid second quarter that exceeded the most bullish of forecasts. The answer is simple. Facebook, despite its massive size, had largely been forgotten by most investors. Earlier this month, I noted how this once-hot IPO had been steadily falling this past spring, even as the rest of the… Read More

How does a company worth $60 billion manage to completely shock investors and deliver a 25% one-day gain? That’s the question being asked at traders’ desks across the country after Facebook delivered a rock-solid second quarter that exceeded the most bullish of forecasts. The answer is simple. Facebook, despite its massive size, had largely been forgotten by most investors. Earlier this month, I noted how this once-hot IPO had been steadily falling this past spring, even as the rest of the market was in party mode.  Suddenly, this stock is touching 52-week highs again, and if you were savvy enough to own this stock going into the quarter, then this is no time to be a seller. After a quick move to $33, this stock may be headed toward the $40 mark by year‘s end. The Great Second Quarter Facebook’s impressive second-quarter results have been discussed in many other forums, so I’ll only recap the key metrics here: Strong advertising… Read More

If you’ve been investing in countries such as South Africa and Brazil, the phrase “bear market” comes to mind. Their stock markets are off more than 20% this… Read More

Will interest rates continue their recent ascent?  If so, many investors will come to question the wisdom of holding dividend-paying stocks. After all, bonds and… Read More

As 2012 came to a close, investors increasingly questioned the wisdom of owning gold or gold-related stocks and funds. After all, a commodity known as an inflation hedge is of dubious value when inflation is nonexistent. And for investors who still expected the Federal Reserve’s aggressive stimulus efforts to eventually fuel inflation, patience was starting to wear thin. What began as a steady exodus out of gold in… Read More

As 2012 came to a close, investors increasingly questioned the wisdom of owning gold or gold-related stocks and funds. After all, a commodity known as an inflation hedge is of dubious value when inflation is nonexistent. And for investors who still expected the Federal Reserve’s aggressive stimulus efforts to eventually fuel inflation, patience was starting to wear thin. What began as a steady exodus out of gold in the winter morphed into something a lot more dramatic this spring. In the past few months, gold has endured a pair of scary plunges that has pushed even its most ardent supporters to the sidelines. Gold prices now sit at their lowest levels in nearly three years. But does the Fed‘s recent announcement that it will begin to wind down its massive quantitative easing (QE) program change the picture for… Read More