Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun… Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun to rebound and are expected to rise gradually higher over the next few years. That auto loan rate will likely be closer to 5% in a few years.  In fact, this issue is probably being discussed in boardrooms at the top auto companies and just about any firm that relies on low-cost loans to spur demand. Corporate executives realize that consumer confidence and spending trends remain challenged, even with the aid of low interest rates. Read More

The latest rankings of the world’s richest people show that telecom magnate Carlos Slim of Mexico is again on the top of the heap, followed by Microsoft founder Bill Gates. Both of these men amassed dizzying fortunes primarily with one investment: Gates with Microsoft (Nasdaq: MSFT) and Slim with America Movil (NYSE: AMX), one of the largest telecom companies in the world. Fourth on the list is Warren Buffett. The Oracle of Omaha also made his fortune with one company, Berkshire Hathaway (NYSE: BRK-B), but there’s a twist. While Microsoft is focused on software… Read More

The latest rankings of the world’s richest people show that telecom magnate Carlos Slim of Mexico is again on the top of the heap, followed by Microsoft founder Bill Gates. Both of these men amassed dizzying fortunes primarily with one investment: Gates with Microsoft (Nasdaq: MSFT) and Slim with America Movil (NYSE: AMX), one of the largest telecom companies in the world. Fourth on the list is Warren Buffett. The Oracle of Omaha also made his fortune with one company, Berkshire Hathaway (NYSE: BRK-B), but there’s a twist. While Microsoft is focused on software and America Movil on cellphones, Berkshire is a holding company. Its business is to own other businesses. It is Buffett’s uncanny ability to pick winning businesses that has enabled the modest man from Omaha to pile up nearly $55 billion. But is it really all that uncanny? I don’t think so. If you go to the bookstore, you’ll find a whole shelf of books on Buffett in the investing section. They will be chock-full of his witty sayings. His earthy common sense resonates with everyone. No matter… Read More

Every profession has its buzzwords to create the illusion that things are more complex than they really are. Everything from the Latin terms used by medical doctors to the chatter of gearheads talking about the latest car engine, simple concepts are often clothed in complicated-sounding terms.#-ad_banner-# Investing professionals are no different in their use of complicated nomenclature to describe simple things and ideas.  I know I was intimidated when I first heard the term statistical… Read More

Every profession has its buzzwords to create the illusion that things are more complex than they really are. Everything from the Latin terms used by medical doctors to the chatter of gearheads talking about the latest car engine, simple concepts are often clothed in complicated-sounding terms.#-ad_banner-# Investing professionals are no different in their use of complicated nomenclature to describe simple things and ideas.  I know I was intimidated when I first heard the term statistical arbitrage. To me, it sounded like I would need a math Ph.D. or at least an advanced understanding of statistical theory to figure out what it meant. Not being an advanced math person, I was fortunate to have had a trading mentor who patiently explained to me what statistical arbitrage is and how to use it profitably.  Ever since I was made aware of this unique and profitable trading technique, I have used it in a variety of market conditions to capture profits that would otherwise be unavailable. This method’s not for… Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun… Read More

Are you looking to buy a new car? Don’t pay cash.  A 48-month loan for a new car is currently just 2.58%, according to Bankrate.com. That’s below the historical rate of inflation (going back over the past half century). By the time your loan is paid off in four years, the inflation rate could exceed that 2.58% rate, meaning your real borrowing costs would actually be less than zero percent.#-ad_banner-# But don’t wait too long. Interest rates have begun to rebound and are expected to rise gradually higher over the next few years. That auto loan rate will likely be closer to 5% in a few years.  In fact, this issue is probably being discussed in boardrooms at the top auto companies and just about any firm that relies on low-cost loans to spur demand. Corporate executives realize that consumer confidence and spending trends remain challenged, even with the aid of low interest rates. Read More

Lodging real estate investment trusts (REITs) are in the early stages of what promises to be a multiyear recovery that is creating profit opportunities for dividend investors.#-ad_banner-# A key hotel metric, revenue per available room (RevPAR), is forecast to rise 6% this year and next year, reversing a trend of double-digit declines during the recession. The… Read More

Lodging real estate investment trusts (REITs) are in the early stages of what promises to be a multiyear recovery that is creating profit opportunities for dividend investors.#-ad_banner-# A key hotel metric, revenue per available room (RevPAR), is forecast to rise 6% this year and next year, reversing a trend of double-digit declines during the recession. The premium hotel segment is expected to experience even stronger gains, according to a PriceWaterhouseCoopers study. These gains are being fueled by an improving U.S. economy, increasing business and vacation travel, and anemic growth in the supply of new hotels. The lodging sector struggled during the recession, and difficulties in obtaining financing kept hotel developers on the sidelines. As a result, the domestic supply of new hotel rooms grew only 0.5% in 2011 and 2012, well below the 25-year average annual growth rate of 2.6%. There has not been… Read More

The S&P 500 is on fire. The index is on track for its ninth consecutive month of gains. And chances are any stock you’ve owned in that time has risen at a respectable pace as well. Yet one thought is gnawing at many investors: Is it time to think about locking in profits?  After all, we’re already past the point where stocks saw substantial pullbacks in recent years. And this… Read More

The S&P 500 is on fire. The index is on track for its ninth consecutive month of gains. And chances are any stock you’ve owned in that time has risen at a respectable pace as well. Yet one thought is gnawing at many investors: Is it time to think about locking in profits?  After all, we’re already past the point where stocks saw substantial pullbacks in recent years. And this year‘s surge is even more impressive than the surges we saw early in 2010, 2011 and 2012. S&P 500: A Surge, A Swoon And A Surge Again Yet even if one chooses to start selling stocks, it’s not always clear which candidates in your portfolio are ripe for jettisoning. Here are five guideposts I look for to spot potential sell candidates. 1. Portfolio Concentration If you aim to construct a portfolio with an equal weighting given to all stocks, you’ll notice that the weighting changes over time,… Read More

Today, I want to share a little history lesson with you. It comes from one of the worst periods of human history but makes a point about human innovation that can’t be said enough — that given enough time and capital, we’re capable of some pretty remarkable things. And the good news for investors like you and me is that we can use this universal truth to profit handsomely… The Great Famine was among the worst episodes of starvation in recorded history. #-ad_banner-#Crops were devastated after an abrupt… Read More

Today, I want to share a little history lesson with you. It comes from one of the worst periods of human history but makes a point about human innovation that can’t be said enough — that given enough time and capital, we’re capable of some pretty remarkable things. And the good news for investors like you and me is that we can use this universal truth to profit handsomely… The Great Famine was among the worst episodes of starvation in recorded history. #-ad_banner-#Crops were devastated after an abrupt change in weather patterns in the early 1300s. Many seeds that were planted simply rotted in the soil. Livestock couldn’t be fed due to lack of grain, and malnourished stock succumbed to disease. Famine began to spread from poorer peasants to wealthier nobleman and merchants. Even King Edward II had trouble finding food for himself. Millions starved and died. By 1400, Britain’s population stood at an estimated 2 million people, off as much as two-thirds from its peak less than a century earlier. But over time, something happened that… Read More

The old adage of risk equaling reward couldn’t have been truer in 2008, when the stock market was in chaos.#-ad_banner-# Great rewards went to investors who took the risk of stepping into the fray to buy the lows. But during the same time, many investors were practically wiped out because they failed to manage their risks wisely in the highly volatile environment. The stock market today isn’t as volatile as it was during the financial crisis. However, the same investing maxim… Read More

The old adage of risk equaling reward couldn’t have been truer in 2008, when the stock market was in chaos.#-ad_banner-# Great rewards went to investors who took the risk of stepping into the fray to buy the lows. But during the same time, many investors were practically wiped out because they failed to manage their risks wisely in the highly volatile environment. The stock market today isn’t as volatile as it was during the financial crisis. However, the same investing maxim still holds: The greater the risk, the greater the rewards.  Many investors shun risk. These risk-averse investors pile into the safest possible investments in an effort to preserve principal at all costs. This attitude will most likely preserve your portfolio, but it will also greatly decrease your potential for market-beating rewards.  Lessons Learned What I learned from the risk-embracing derivative culture of 2008 is that both the shunning of risk and the gunslinging embracing… Read More

Long live the bond market bull.  It started running in 1980, when a series of interest rate increases by the Federal Reserve finally broke the back of… Read More