Imagine a world where you can get anything you want, when you want it, all with the click of a mouse. Well, maybe that’s not too tough to fathom thanks to the e-commerce revolution and streaming content at your fingertips. #-ad_banner-#But consider a situation that happened to a good friend of mine recently — I’m not just making this up for a good story. My friend, who I’ll call Steven, made it home after a treacherous commute through Austin traffic. His wife greeted him at the door and walked him to the dining room… Read More

Imagine a world where you can get anything you want, when you want it, all with the click of a mouse. Well, maybe that’s not too tough to fathom thanks to the e-commerce revolution and streaming content at your fingertips. #-ad_banner-#But consider a situation that happened to a good friend of mine recently — I’m not just making this up for a good story. My friend, who I’ll call Steven, made it home after a treacherous commute through Austin traffic. His wife greeted him at the door and walked him to the dining room where, to his surprise, Steven’s in-laws sat around a perfectly-set table. As it turned out, Steven forgot that his wife offered to host his father-in-law’s birthday dinner. There was no getting out of this pickle for Steven. He did what many of us have probably done before and quickly scribbled his signature on the bottom of the birthday card that his wife picked up earlier in the day. Honorable? No. Are many of us guilty of doing the same? Possibly. Now consider the… Read More

     Financial planners routinely advise clients to plan for a retirement nest egg that can be drawn down at a 4% annual rate.   #-ad_banner-#Ongoing investment gains in the retirement portfolio, coupled with that 4% drawdown, is often expected to be sufficient to meet income needs without running the risk of rapidly depleting your portfolio.   The problem: you need a portfolio valued at well over a million dollars to meet most budgets.   With two market crashes since 2000, most portfolios have fallen well short of such a lofty goal. And  withdrawing a higher percentage every year in… Read More

     Financial planners routinely advise clients to plan for a retirement nest egg that can be drawn down at a 4% annual rate.   #-ad_banner-#Ongoing investment gains in the retirement portfolio, coupled with that 4% drawdown, is often expected to be sufficient to meet income needs without running the risk of rapidly depleting your portfolio.   The problem: you need a portfolio valued at well over a million dollars to meet most budgets.   With two market crashes since 2000, most portfolios have fallen well short of such a lofty goal. And  withdrawing a higher percentage every year in retirement risks depleting your nest egg too soon, which can lead to financial ruin.   There is a better way to plan for retirement, a way that does not rely on arbitrary investing rules.   To Trust Or Not To Trust The 4% Rule? Fidelity Investments recently found that investors heading into retirement, people age 55 to 64 with both a 401K and an IRA, had a combined average balance of $261,400. Those with only a 401K had a balance of just $165,200. Using the 4% rule means living on less than $10,500 a year or about $871 per month in… Read More

The other day, I had an idea for a product. This happens to me fairly often, and the outcome is always the same: I look online and, lo and behold, someone else has already come up with it. So after I got tired of this idea rattling around my brainpan, I Googled it. #-ad_banner-#I found nothing. So I decided to allow the idea to marinate a little. While I was driving to church the following Sunday, I had an inspiration. Not only did I have an idea for the product, I now thought I… Read More

The other day, I had an idea for a product. This happens to me fairly often, and the outcome is always the same: I look online and, lo and behold, someone else has already come up with it. So after I got tired of this idea rattling around my brainpan, I Googled it. #-ad_banner-#I found nothing. So I decided to allow the idea to marinate a little. While I was driving to church the following Sunday, I had an inspiration. Not only did I have an idea for the product, I now thought I knew how to make it work. So after lunch, I stopped by a couple of stores and bought four ingredients. I went home and mixed them together in my garage. The result worked exactly as I had thought it would. I had a product. Something new. With a big market, I might add. I built a spreadsheet to estimate costs. I went online and looked at potential packaging material and machines. I even started looking at used manufacturing equipment to mix the ingredients and fill the tubular plastic packages… Read More

Judging by the numbers, buyback plans remain extremely popular. In the S&P 500, 374 companies, or 75% of the index, bought back shares in the third quarter, according to Factset Research. Those companies spent $567 billion as of the end of the third quarter on a rolling 12-month basis. That’s up 27% from the prior 12-month period. Those are stunning numbers. Yet a debate is raging in investment circles. Are share buybacks the best use of corporate funds?  And equally important, are they a boon to investors that are in search of market-beating stocks? #-ad_banner-#The first question goes to the… Read More

Judging by the numbers, buyback plans remain extremely popular. In the S&P 500, 374 companies, or 75% of the index, bought back shares in the third quarter, according to Factset Research. Those companies spent $567 billion as of the end of the third quarter on a rolling 12-month basis. That’s up 27% from the prior 12-month period. Those are stunning numbers. Yet a debate is raging in investment circles. Are share buybacks the best use of corporate funds?  And equally important, are they a boon to investors that are in search of market-beating stocks? #-ad_banner-#The first question goes to the heart of capital allocation. Deploying funds toward buybacks can lead to a hike in debt, stunt the growth of dividends or starve capital spending plans of badly-needed fuel. To be sure, some companies, especially those that bought back shares when they traded at much higher levels, didn’t make the right choice. But for investors, buybacks are usually a clear positive. Since 2008, companies with the largest buyback programs by dollar value have outperformed the broader market by 20%, according to Barclays. The PowerShares Buyback Achievers ETF (NYSE: PKW) has delivered an 18.7% annualized gain over the past… Read More

Retailers rallied Thursday on news that retail sales increased by the most in eight months, rising 0.7% in November. These gains were mainly attributed to lower fuel prices and rising employment encouraging consumers to go out and spend this holiday season. #-ad_banner-#In the past month, consumer discretionary has gone from one of the worst-performing sectors to one of the best, up 3.6% compared with a loss of 0.5% for the S&P 500. For those last-minute shoppers, there’s still time to play the trend. In each of the past five years, the sector has shown gains in December. And this year… Read More

Retailers rallied Thursday on news that retail sales increased by the most in eight months, rising 0.7% in November. These gains were mainly attributed to lower fuel prices and rising employment encouraging consumers to go out and spend this holiday season. #-ad_banner-#In the past month, consumer discretionary has gone from one of the worst-performing sectors to one of the best, up 3.6% compared with a loss of 0.5% for the S&P 500. For those last-minute shoppers, there’s still time to play the trend. In each of the past five years, the sector has shown gains in December. And this year could be even better than usual with falling oil prices equating to a tax cut for many families.   Within the sector, my top pick is North America’s second largest general merchandise retailer, Target (NYSE: TGT).  The stock boasts outstanding technicals and upbeat fourth-quarter earnings guidance, driven by holiday sales, which are expected to be strong. On Wednesday, Nov. 26, Target offered a pre-sale on select Black Friday deals. By 9 a.m. that day, online sales topped total sales on the same day last year. The company also reported Thanksgiving Thursday was its best online sales day in its history,… Read More

Retailers rallied Thursday on news that retail sales increased by the most in eight months, rising 0.7% in November. These gains were mainly attributed to lower fuel prices and rising employment encouraging consumers to go out and spend this holiday season. #-ad_banner-#In the past month, consumer discretionary has gone from one of the worst-performing sectors to one of the best, up 3.6% compared with a loss of 0.5% for the S&P 500. For those last-minute shoppers, there’s still time to play the trend. In each of the past five years, the sector has shown gains in December. And this year… Read More

Retailers rallied Thursday on news that retail sales increased by the most in eight months, rising 0.7% in November. These gains were mainly attributed to lower fuel prices and rising employment encouraging consumers to go out and spend this holiday season. #-ad_banner-#In the past month, consumer discretionary has gone from one of the worst-performing sectors to one of the best, up 3.6% compared with a loss of 0.5% for the S&P 500. For those last-minute shoppers, there’s still time to play the trend. In each of the past five years, the sector has shown gains in December. And this year could be even better than usual with falling oil prices equating to a tax cut for many families.   Within the sector, my top pick is North America’s second largest general merchandise retailer, Target (NYSE: TGT).  The stock boasts outstanding technicals and upbeat fourth-quarter earnings guidance, driven by holiday sales, which are expected to be strong. On Wednesday, Nov. 26, Target offered a pre-sale on select Black Friday deals. By 9 a.m. that day, online sales topped total sales on the same day last year. The company also reported Thanksgiving Thursday was its best online sales day in its history,… Read More

Back in my Wall Street research days, we called it “Going to the dark side.” Every year, a few of our fellow research analysts would announce that he is quitting and going to work for a company he was once tasked to follow. The move can make sense. Analysts often know a great deal about the competitive environment in the industries they follow, and they develop strong opinions about which companies in an industry have the right management vision and which ones don’t. #-ad_banner-#Jonathan Litt took a slightly different route. He parlayed a decade’s worth of buy-side and sell-side real… Read More

Back in my Wall Street research days, we called it “Going to the dark side.” Every year, a few of our fellow research analysts would announce that he is quitting and going to work for a company he was once tasked to follow. The move can make sense. Analysts often know a great deal about the competitive environment in the industries they follow, and they develop strong opinions about which companies in an industry have the right management vision and which ones don’t. #-ad_banner-#Jonathan Litt took a slightly different route. He parlayed a decade’s worth of buy-side and sell-side real estate research experience into his own investment firm, which, you guessed it, focuses on real estate. In 2008, Litt launched the hedge fund LandandBuildings, which currently has a respectable, but not massive, $100 million in assets under management. Though there are hedge funds with considerably more capital deployed in real estate, few have cultivated the spotlight as well as Litt. Back in his Wall Street days, he was known for his blunt style of writing and often harsh opinions about the companies he followed. And these days, he’s using that style to rattle the cages at… Read More

There is a classic conundrum facing dividend-focused investors: Income or capital appreciation?   The iShares Select Dividend ETF (NYSE: DVY) is a classic example. It delivers a 3% yield and relatively low volatility, but has underperformed the iShares S&P 500 Growth Fund (NYSE: IVW) by roughly 40 percentage points  over the past ten years on  a total return basis.      A decent yield is always nice, but a 40% gap is too large to ignore.   There is one way to get the best of both worlds. The secret is what type of income stocks you… Read More

There is a classic conundrum facing dividend-focused investors: Income or capital appreciation?   The iShares Select Dividend ETF (NYSE: DVY) is a classic example. It delivers a 3% yield and relatively low volatility, but has underperformed the iShares S&P 500 Growth Fund (NYSE: IVW) by roughly 40 percentage points  over the past ten years on  a total return basis.      A decent yield is always nice, but a 40% gap is too large to ignore.   There is one way to get the best of both worlds. The secret is what type of income stocks you focus on.   Many  dividend-paying companies operate in mature industries with slower sales growth and competitive environments. Such dynamics often generate solid cash flow, but high payout ratios and saturated markets mean little in the way of stock price appreciation.   Find one of these cash machines with new growth engines and you’ve got yourself a stock that could be the best of both worlds.   A Cash Machine With Nowhere To Go For years, the U.S. telecom sector has been the model of slow-growth dividend stocks. Despite fairly reliable cash yields, the iShares U.S. Telecommunications ETF (NYSE: IYZ), for… Read More

Back in August, I told readers how Corporate America has been repurchasing their own stocks at a record rate. According to Standard & Poor’s, the 500 largest U.S. companies (that make up the S&P 500 Index) spent nearly $159.3 billion to buy back shares of their own stock in the first quarter of this year (the latest data available). That is the highest quarterly amount spent in seven years and twice what corporations spent on dividends. #-ad_banner-#When corporations buy back shares of their own stock, it increases the amount of earnings attributable to each share, which as we talked about… Read More

Back in August, I told readers how Corporate America has been repurchasing their own stocks at a record rate. According to Standard & Poor’s, the 500 largest U.S. companies (that make up the S&P 500 Index) spent nearly $159.3 billion to buy back shares of their own stock in the first quarter of this year (the latest data available). That is the highest quarterly amount spent in seven years and twice what corporations spent on dividends. #-ad_banner-#When corporations buy back shares of their own stock, it increases the amount of earnings attributable to each share, which as we talked about before in StreetAuthority Daily can lead to healthy gains for shareholders. That said, investors should know there’s a wrong way and a right way for corporations to promote share price gains through stock buybacks — one that can lead you to significant investment losses, and the other that could lead to you market-beating gains. First, the wrong way. Because share buybacks boost a company’s earnings per share (EPS), many large companies that have seen sluggish revenue growth over the past few years have been abusing this practice. And back in July, I told readers of a well-known company doing just… Read More

I recently paid $2.89 per gallon for gasoline. I didn’t fill up the tank. But I did buy more gas at that price than I did the week earlier when gas was at $2.99 per gallon. Many years ago, my father taught my brother and me about the benefits of buying less gas when prices were relatively high and more gas when prices were relatively low. #-ad_banner-#One of my father’s passions was classic cars. At one point, my family owned two four-door 1966 Lincoln Continental convertibles. Their gas tanks held 25 gallons, which was a good thing. They needed those… Read More

I recently paid $2.89 per gallon for gasoline. I didn’t fill up the tank. But I did buy more gas at that price than I did the week earlier when gas was at $2.99 per gallon. Many years ago, my father taught my brother and me about the benefits of buying less gas when prices were relatively high and more gas when prices were relatively low. #-ad_banner-#One of my father’s passions was classic cars. At one point, my family owned two four-door 1966 Lincoln Continental convertibles. Their gas tanks held 25 gallons, which was a good thing. They needed those big tanks since they only got about nine miles to the gallon. And maybe that’s why dividend reinvestment resonates with me today. From October 8 through October 16, the S&P 500 dropped 5.4%. When the market drops that dramatically over such a short period, it gives even the most disciplined investors pause. But where other investors panicked, I was able to buy more shares of stocks I own — at cheaper prices and higher yields. But I have to give credit where credit is due. It wasn’t my disciplined nerves of steel that guided my hand during the market pullback. Read More