First of all, I’d like to wish you all a Happy New Year. My premium newsletter, The Daily Paycheck, has now officially welcomed in seven new years. I launched the newsletter in mid-December 2009, with a massive stock market correction still in the rear view mirror. #-ad_banner-#Some people thought I should wait to introduce the new advisory. They argued that market conditions were still too unstable. They were convinced that a newsletter utilizing dividend reinvestment would appeal to only the most conservative investors, who would still be on the sidelines. But I was convinced that The Daily Paycheck was the… Read More

First of all, I’d like to wish you all a Happy New Year. My premium newsletter, The Daily Paycheck, has now officially welcomed in seven new years. I launched the newsletter in mid-December 2009, with a massive stock market correction still in the rear view mirror. #-ad_banner-#Some people thought I should wait to introduce the new advisory. They argued that market conditions were still too unstable. They were convinced that a newsletter utilizing dividend reinvestment would appeal to only the most conservative investors, who would still be on the sidelines. But I was convinced that The Daily Paycheck was the perfect advisory for risky markets — because I specifically designed it that way. By design, the system maximizes income, maximizes growth and minimizes risk. An investment system that minimizes risk is likely to come in handy again this year. Barely a few weeks into the new year and we’ve already had our share. It appears that the growth of the Chinese economy is continuing to slow. Iran and Saudi Arabia have severed diplomatic relations following Saudi Arabia’s execution of a prominent Shiite cleric. To top it off, North Korea claimed a successful test of a hydrogen bomb recently. Although the… Read More

I remember buying my first car back in 1999. I had just graduated from the University of Kansas. At the time, I was thrilled about getting what I thought was an excellent interest rate of 9.99%.  Flash forward 16 years and American consumers are buying cars with interest rates hovering around 0%.  #-ad_banner-#That’s because the Federal Reserve has held interest rates at record lows since the financial crisis in 2008. But that’s all about to change. After years of speculation from economists and market analysts, the Fed finally announced the long-awaited news we’ve all be expecting:  Interest rates are back… Read More

I remember buying my first car back in 1999. I had just graduated from the University of Kansas. At the time, I was thrilled about getting what I thought was an excellent interest rate of 9.99%.  Flash forward 16 years and American consumers are buying cars with interest rates hovering around 0%.  #-ad_banner-#That’s because the Federal Reserve has held interest rates at record lows since the financial crisis in 2008. But that’s all about to change. After years of speculation from economists and market analysts, the Fed finally announced the long-awaited news we’ve all be expecting:  Interest rates are back on the rise.  Recently, Chair Janet Yellen announced the Federal Reserve would raise the federal funds rate to a range of 0.25% to 0.5%. That’s the first such increase since 2006.  Not surprisingly, this news made some investors nervous. Historically speaking, U.S. equity returns have fallen below their long-term averages in periods after a rate hike.  In fact, according to a study from Nuveen Asset Management, in the past 35 years, U.S. stocks gained an average of just 2.6% in the 250 days following a rate increase.  This year, U.S. GDP is on pace to grow by just 2.6%. And… Read More

There are about a thousand of them listed on the U.S. exchanges. They track everything from the S&P 500… to gold… to Treasury bonds… and much more. #-ad_banner-#They are basically nothing more than portfolios of stocks, bonds or commodities that trade on the major exchanges as a single security. But underneath a placid exterior, one of America’s fastest-growing asset classes reached a key milestone just a few short years ago: Total assets invested in U.S. exchange-traded funds (ETFs) surpassed $1 trillion for the first time. That represents the culmination of a remarkable episode of growth. The first U.S.-traded ETF was… Read More

There are about a thousand of them listed on the U.S. exchanges. They track everything from the S&P 500… to gold… to Treasury bonds… and much more. #-ad_banner-#They are basically nothing more than portfolios of stocks, bonds or commodities that trade on the major exchanges as a single security. But underneath a placid exterior, one of America’s fastest-growing asset classes reached a key milestone just a few short years ago: Total assets invested in U.S. exchange-traded funds (ETFs) surpassed $1 trillion for the first time. That represents the culmination of a remarkable episode of growth. The first U.S.-traded ETF was launched on January 29, 1993 — so it took fewer than 19 years for the ETF industry to crack the $1 trillion barrier. To put that in perspective, it took the mutual fund industry (first launched in 1924) 66 years to surpass $1 trillion in assets. Assets invested in ETFs grew at a 31% annualized pace from 2000 to 2011 compared to just 6% annual growth for mutual funds. And alongside the growth of ETFs is the growth in closed-end funds (CEFs). The differences between CEFs and ETFs are small — both allow you to buy into a basket of… Read More

Two of my joys in life are investing and poker. As it turns out, I’m not alone when it comes to pairing these vocations. The Dallas banker Andy Beal is famous for taking on the best professional poker players in the world, chronicled in the book “The Professor, the Banker and the Suicide King: Inside the Richest Poker Game of All Time.” But he didn’t make his billions playing poker. He ended up on The Forbes 400 list because he wisely invested in distressed assets during the financial crisis. #-ad_banner-#By the same token, David Einhorn has won over $5 million… Read More

Two of my joys in life are investing and poker. As it turns out, I’m not alone when it comes to pairing these vocations. The Dallas banker Andy Beal is famous for taking on the best professional poker players in the world, chronicled in the book “The Professor, the Banker and the Suicide King: Inside the Richest Poker Game of All Time.” But he didn’t make his billions playing poker. He ended up on The Forbes 400 list because he wisely invested in distressed assets during the financial crisis. #-ad_banner-#By the same token, David Einhorn has won over $5 million playing poker. But Einhorn amassed more than a billion dollars as a hedge fund manager. He made headlines when he shorted Lehman Brothers stock before the 158-year-old financial services company went bankrupt. There are a number of important lessons that I learned from poker and have successfully applied to investing. But I credit one lesson in particular for the strategy that has allowed me to nearly double my portfolio’s income in only a few years. Increase Your Bets On A Winning Hand People are generally adept at selecting a good investment, one that has the potential to produce solid… Read More

The story I’m about to share with you today is one I’ve shared with my High-Yield Investing premium subscribers before. But I think it bears repeating, because something big and entirely unexpected happened a couple of weeks ago, and few investors noticed. And to put it simply, the implications could be huge for many income investors. #-ad_banner-#But more on that in a moment… The day before Thanksgiving in 1996, Rich Kinder left his post at Enron. He was disappointed that Kenneth Lay had passed him over for the CEO job. Soon after, an old college buddy, Bill Morgan, approached Kinder… Read More

The story I’m about to share with you today is one I’ve shared with my High-Yield Investing premium subscribers before. But I think it bears repeating, because something big and entirely unexpected happened a couple of weeks ago, and few investors noticed. And to put it simply, the implications could be huge for many income investors. #-ad_banner-#But more on that in a moment… The day before Thanksgiving in 1996, Rich Kinder left his post at Enron. He was disappointed that Kenneth Lay had passed him over for the CEO job. Soon after, an old college buddy, Bill Morgan, approached Kinder with a business proposition. Morgan had just bought some assets Enron had no use for: a couple of small pipeline systems and a coal terminal. He needed someone like Kinder to run the business. Kinder agreed, and the partnership was christened Kinder Morgan Inc. in February 1997. Kinder doubled the company’s market capitalization to nearly half a billion dollars by watching costs and shipping more volume through the pipelines. He did all of that in just seven months. Today, Kinder Morgan Energy Partners (NYSE: KMI) is a $35 billion business, operating more than 80,000 miles of pipeline and roughly 180… Read More

For months, we’ve been telling StreetAuthority readers to expect the Federal Reserve to hike interest rates this year. And now, the moment has finally arrived: On December 16, the Fed announced that it would raise interest rates by a quarter percentage point, to between 0.25% and 0.5%. But we’ve also maintained that much of the furor in the media surrounding the possibility of a rate hike is nonsense. The name of the game will probably be “low and slow” after this first rate hike. And considering how long this has already been dragged out, companies and individual… Read More

For months, we’ve been telling StreetAuthority readers to expect the Federal Reserve to hike interest rates this year. And now, the moment has finally arrived: On December 16, the Fed announced that it would raise interest rates by a quarter percentage point, to between 0.25% and 0.5%. But we’ve also maintained that much of the furor in the media surrounding the possibility of a rate hike is nonsense. The name of the game will probably be “low and slow” after this first rate hike. And considering how long this has already been dragged out, companies and individual investors have had ample time to prepare. #-ad_banner-#In short, keep your focus on buying fantastic companies at reasonable prices and the rest should take care of itself. My colleague Andy Obermueller has mentioned a favorite asset class that is directly affected by interest rates: real estate investment trusts, or REITs for short. But rather than shy away from this asset class, Andy has been telling his readers to prepare for a tremendous buying opportunity. REITs work like this. As a public company, REITs pool cash from investors to buy income-producing real… Read More

This year marks the 100th anniversary of Albert Einstein’s General Theory of Relativity. Einstein is often portrayed as a lone genius who made his historic scientific breakthrough while working as a patent clerk. But despite his lone genius label, Einstein was smart enough to know that collaboration was the best way to take on a challenge. He frequently discussed his ideas with friends and family. In fact, he referred to his friend and engineer Michele Besso as “the best sounding board in Europe.” #-ad_banner-#As I reflected on all that I was thankful for this… Read More

This year marks the 100th anniversary of Albert Einstein’s General Theory of Relativity. Einstein is often portrayed as a lone genius who made his historic scientific breakthrough while working as a patent clerk. But despite his lone genius label, Einstein was smart enough to know that collaboration was the best way to take on a challenge. He frequently discussed his ideas with friends and family. In fact, he referred to his friend and engineer Michele Besso as “the best sounding board in Europe.” #-ad_banner-#As I reflected on all that I was thankful for this year, I thought of all the subscribers to my premium newsletter, The Daily Paycheck. My readers are my sounding board — my touchstone. One of The Daily Paycheck’s primary missions is to help investors achieve a more financially secure retirement. While this is clearly an easier task than solving one of the great scientific mysteries of all time, it is a challenge that is made easier with a group of like-minded investors — and the helpful ideas and suggestions from The Daily Paycheck’s readers. While I can’t respond individually to the… Read More

The U.S. stock market has been in a holding pattern of sorts, awaiting the Federal Reserve Board’s decision about whether or not to raise short-term interest rates. By tomorrow, we’ll likely hear the announcement of their decision to boost rates by 25 basis points (0.25 percentage points). The move has been telegraphed so effectively, it would be almost dangerous for the Fed not to move at this point — that’s how much the world expects the hike. Investors probably will take the much-predicted news calmly, though it’s possible that some higher-yielding stocks fall on the news. That’s because some money… Read More

The U.S. stock market has been in a holding pattern of sorts, awaiting the Federal Reserve Board’s decision about whether or not to raise short-term interest rates. By tomorrow, we’ll likely hear the announcement of their decision to boost rates by 25 basis points (0.25 percentage points). The move has been telegraphed so effectively, it would be almost dangerous for the Fed not to move at this point — that’s how much the world expects the hike. Investors probably will take the much-predicted news calmly, though it’s possible that some higher-yielding stocks fall on the news. That’s because some money will be shifted toward money market and short-term fixed-income instruments, which will become relatively more attractive as yields rise. #-ad_banner-#The short-term selloff could represent an opportunity to snatch up shares of high-quality, dividend-paying stocks that take a hit on the news. To improve my odds, I’ll be focusing on stocks that are already somewhat unloved, for short-term reasons that won’t matter much in the long run. Here are two such candidates to consider for both capital appreciation and income: Emerson Electric (NYSE: EMR) is one of the most diversified electrical-equipment conglomerates in the United States, a $25-billion global manufacturing leader… Read More

I get a lot of questions each month from subscribers to my premium income newsletter, High-Yield Investing. With such a devoted following, I make it a point to read every single message. And every once in a while, I’ll come across a question from a subscriber that I think is worth sharing. #-ad_banner-#The following came across my desk from a subscriber, Megan P. from Phoenix, asking whether the strong dollar would present some attractive opportunities for investors. Q: Are there any high-quality dividend payers temporarily hurt by the strong U.S. dollar that could be attractive turnaround candidates? Here was my… Read More

I get a lot of questions each month from subscribers to my premium income newsletter, High-Yield Investing. With such a devoted following, I make it a point to read every single message. And every once in a while, I’ll come across a question from a subscriber that I think is worth sharing. #-ad_banner-#The following came across my desk from a subscriber, Megan P. from Phoenix, asking whether the strong dollar would present some attractive opportunities for investors. Q: Are there any high-quality dividend payers temporarily hurt by the strong U.S. dollar that could be attractive turnaround candidates? Here was my answer… Yes, there are some strong turnaround candidates that have taken a hit recently, and I’m tracking a few of them for my portfolio. For some background, the strong dollar has been a thorn in the side of many large multinational companies over the past few quarters. A stronger greenback not only makes exported goods less competitive overseas, but also erodes the value of sales conducted in foreign markets when revenues denominated in yen, euros and rubles are converted back into dollars. One such opportunity is Genuine Parts Company (NYSE: GPC). This specialty retailer is best known for… Read More

As interest rates hit historic lows, many investors piled into high-yield energy stocks for yield believing that the U.S. energy revolution would keep dividend payments increasing.  The crash in oil prices has put cash flow in danger and high debt loads from the heady acquisition days is weighing on balance sheets. Share prices have tumbled, sending yields on some energy plays to 10% and higher.  But dividends are being cut to protect cash flow and investors are being trapped into stocks with huge losses and without the yield they were expecting. Is your favorite energy stock about to make the… Read More

As interest rates hit historic lows, many investors piled into high-yield energy stocks for yield believing that the U.S. energy revolution would keep dividend payments increasing.  The crash in oil prices has put cash flow in danger and high debt loads from the heady acquisition days is weighing on balance sheets. Share prices have tumbled, sending yields on some energy plays to 10% and higher.  But dividends are being cut to protect cash flow and investors are being trapped into stocks with huge losses and without the yield they were expecting. Is your favorite energy stock about to make the announcement? Learn the warning signs and check out two names that may be in trouble. Energy Companies Are Bleeding Cash As if last year’s selloff in oil was not enough, the price of West-Texas Intermediate (WTI) has fallen 20% since the end of the third quarter and broke $36 a barrel recently. For the fourth quarter, energy companies in the S&P 500 are expected to post a 34% decline in year-over-year sales and a staggering 65% drop in earnings. Many in the space have already begun protecting cash by cutting dividend payments or reducing capital expenditures. E&P giant Chesapeake… Read More