I had a busy summer. Whether it was helping one son with his Eagle Scout project, shuttling the other one to out-of-state lacrosse tournaments for his summer travel team, or expanding my business, there wasn’t a whole lot of time for leisurely summer stuff. The market has had a busy summer as well. Since the middle of May, the S&P 500 Index has surged nearly 4.5% while the index has climbed more than 10% year-to-date. On the bond side of the market, yields on the 10-year Treasury have fallen nearly 8%, causing pundits and investors alike to fret over extended… Read More

I had a busy summer. Whether it was helping one son with his Eagle Scout project, shuttling the other one to out-of-state lacrosse tournaments for his summer travel team, or expanding my business, there wasn’t a whole lot of time for leisurely summer stuff. The market has had a busy summer as well. Since the middle of May, the S&P 500 Index has surged nearly 4.5% while the index has climbed more than 10% year-to-date. On the bond side of the market, yields on the 10-year Treasury have fallen nearly 8%, causing pundits and investors alike to fret over extended valuations and low yields.  On the surface, it would appear that they’re right. But they’re not diving deep enough. Relative value and attractive yields are out there. A Truly Impressive Income Fund Recently, I’ve been exploring closed-end funds (CEFs). The primary reason is that they typically pay above-average dividend yields and often trade at attractive discounts to their net asset value (NAV). One fund that’s caught my attention is the Franklin Limited Duration Income Trust (NYSE: FTF). With total net assets of around $300 million, FTF focuses on providing investors a high rate of income by taking a bottom-up… Read More

Honestly, even one would have been big news.  But just a couple of weeks ago, in a single day, two U.S.-listed high-yielding companies moved to either significantly reduce or eliminate their dividends.  Both are from industries income investors traditionally flock to, and both stocks dropped sharply on the news.  On August 3, large-cap Israel-based Teva Pharmaceuticals (NYSE: TEVA) announced a 75% cut to its dividend payment. Afterward, the stock lost 44% of its market value in just five days. There is no doubt in my mind that the dividend cut was a major culprit.  Then there’s the much smaller rural… Read More

Honestly, even one would have been big news.  But just a couple of weeks ago, in a single day, two U.S.-listed high-yielding companies moved to either significantly reduce or eliminate their dividends.  Both are from industries income investors traditionally flock to, and both stocks dropped sharply on the news.  On August 3, large-cap Israel-based Teva Pharmaceuticals (NYSE: TEVA) announced a 75% cut to its dividend payment. Afterward, the stock lost 44% of its market value in just five days. There is no doubt in my mind that the dividend cut was a major culprit.  Then there’s the much smaller rural telecom company Windstream Holdings (NYSE: WIN). This former high-yield darling is high-yield no more. Indeed, this company does not even qualify for a “yield” tag now. On August 3, Windstream announced that it would be eliminating its dividend. Naturally, the shares plunged. As I write this, WIN is down more than 75% year-over-year, with 45% of its fall coming in the five days since the announcement.  —Recommended Link— Don’t Hate The Rich, Join Them! Too many people go through life envying the rich and their lavish lifestyles. But what if you could join them? Recently, a group of millionaires and… Read More

There’s something wrong in the stock market. Short-term correlations that were once reliable have been thrown into disarray. Computer-driven trading programs and massive amounts of capital are confusing even the most weathered market skippers. #-ad_banner-#However, long-term correlations remain intact. One of the most reliable market signals, known as Dow Theory, is signaling that investors should dump stocks now.  As the market continues to grind higher, investors would be wise pay attention. Dow Theory has been in use for over 100 years, and is considered to be the basis for most of technical analysis. Originally created by the father of the… Read More

There’s something wrong in the stock market. Short-term correlations that were once reliable have been thrown into disarray. Computer-driven trading programs and massive amounts of capital are confusing even the most weathered market skippers. #-ad_banner-#However, long-term correlations remain intact. One of the most reliable market signals, known as Dow Theory, is signaling that investors should dump stocks now.  As the market continues to grind higher, investors would be wise pay attention. Dow Theory has been in use for over 100 years, and is considered to be the basis for most of technical analysis. Originally created by the father of the Dow Jones Industrial Index, Charles Dow, the theory has undergone very few changes over the last century.  One of the primary tenets of the theory is that indexes must confirm each other to forecast additional upside. Right now, Dow Theory’s most critical index is showing a divergence that is incredibly bearish.  A Closer Look At Dow Theory At its core, Dow Theory is used to clarify trends in the overall direction of the market. The theory breaks down trends into three primary parts. 1. The Primary Movement This is the long-term trend. The Primary Movement can last from… Read More

By just about any measure, one of the hardest things for an investor to do is decide when the time is ripe to start selling some, or all, of a portfolio. For me, that time has arrived. Now, don’t get me wrong. I’m not selling my entire portfolio and moving to cash. But it is time to sell some of my holdings because, for me, the market is getting into dangerous territory.  And I’m becoming more convinced a correction is coming. Here’s why… #-ad_banner-#The Federal Reserve has acted stupidly in keeping interest rates at artificially low levels for such a… Read More

By just about any measure, one of the hardest things for an investor to do is decide when the time is ripe to start selling some, or all, of a portfolio. For me, that time has arrived. Now, don’t get me wrong. I’m not selling my entire portfolio and moving to cash. But it is time to sell some of my holdings because, for me, the market is getting into dangerous territory.  And I’m becoming more convinced a correction is coming. Here’s why… #-ad_banner-#The Federal Reserve has acted stupidly in keeping interest rates at artificially low levels for such a long time. And because real long-term interest rates remain artificially low, any sudden bond market sneeze could blow the lid off the stock market. You see, should the bubble burst in the bond market, rates are likely to rocket higher over a relatively short time. Now, you may ask what might precipitate such an event? Janet Yellen has made known her desire to unwind the Fed’s balance sheet. I say “amen” to that. But doing so at a time when interest rates are rising is fraught with danger. That’s because when the central bank withdraws liquidity by selling its bond… Read More

It’s on every investor’s mind…   “When is this bull market going to end?”   I wish I knew. But I can’t predict the future any better than you can.   What I can tell you is that I’ve been keeping a close eye on a handful of indicators that have historically provided signs of a looming pullback, correction and/or recession — and they’re telling me that we’re not quite there yet.   But the cracks are beginning to show…   Back in June, I told readers of my premium Maximum Profit service about how my system can identify underlying… Read More

It’s on every investor’s mind…   “When is this bull market going to end?”   I wish I knew. But I can’t predict the future any better than you can.   What I can tell you is that I’ve been keeping a close eye on a handful of indicators that have historically provided signs of a looming pullback, correction and/or recession — and they’re telling me that we’re not quite there yet.   But the cracks are beginning to show…   Back in June, I told readers of my premium Maximum Profit service about how my system can identify underlying trends on Wall Street and in the market. I covered how it spotted the feverish pace of share buybacks, the soaring number of stocks with high nominal prices and, of course, how my system had 60% of our portfolio in cash before the market fell as much as 9% at the beginning of 2016.   This week it flashed something a bit more alarming… Something that flies directly in the face of what all the major financial news outlets are telling us.  —Recommended Link— The Best Thing That Ever Came Out Of Washington You know what IRAs and 401(k)s can… Read More

Recently my team and I have been telling my readers about a quiet revolution that’s taking place thanks to eccentric billionaire Elon Musk and his band of scientists at Tesla Motors (Nasdaq: TSLA). You see, for years they’ve been working feverishly at their lab in Fremont, California on a battery that could provide enough energy to power a house. Last year, news came along that they’d finally broken through. And now, for the first time in decades, we could see the entire utility sector turned on its head as a result — leading to massive gains for early investors. As… Read More

Recently my team and I have been telling my readers about a quiet revolution that’s taking place thanks to eccentric billionaire Elon Musk and his band of scientists at Tesla Motors (Nasdaq: TSLA). You see, for years they’ve been working feverishly at their lab in Fremont, California on a battery that could provide enough energy to power a house. Last year, news came along that they’d finally broken through. And now, for the first time in decades, we could see the entire utility sector turned on its head as a result — leading to massive gains for early investors. As you can see, Tesla’s battery storage device looks nothing like your old-fashioned AA battery. It’s a sleek, compact unit that you can mount on the wall in your garage. One single, stand-alone unit delivers enough power to take an entire home completely off the grid. Simply charge it with a solar panel, windmill or any other power source, and you’ve got all the energy you need. Thanks to Tesla, the world is about to see that an energy sea-change has been quietly unfolding before their eyes for several years now. And many of the world’s greatest investors are… Read More

Many people seem to believe that history began when they first became aware of the world around them. At least, that’s how everyone acts. In some areas, we never seem to learn from history. Too many of us believe everything we see is unprecedented. While that may truly apply to a few things — I, for one, cannot find a historical precedent for the idea of “Keeping Up with the Kardashians” — much of what we are seeing now has happened before. In the stock market, we also see familiar patterns. Stocks are overvalued — certainly not the first time… Read More

Many people seem to believe that history began when they first became aware of the world around them. At least, that’s how everyone acts. In some areas, we never seem to learn from history. Too many of us believe everything we see is unprecedented. While that may truly apply to a few things — I, for one, cannot find a historical precedent for the idea of “Keeping Up with the Kardashians” — much of what we are seeing now has happened before. In the stock market, we also see familiar patterns. Stocks are overvalued — certainly not the first time that’s happened. However, this time, we are seeing a rather extreme valuation. Below is a chart comparing the value of the stocks in the S&P 500 to the gross domestic product (GDP). That ratio is shown as the red line. The blue line is a broader indicator that compares the value of exchange-listed stocks to GDP.  Both measures show stocks are more overvalued now than then they were even before the 2008 bear market. Valuation is not a timing tool. Stocks can remain overvalued for years. But it is a warning. History tells us that, when stocks do… Read More