In the early stages of the bull market, investors flocked to companies with steady and growing dividends. Yet, since the market began to think about an eventual rise in interest rates back in May 2013, this asset class has lost a bit of luster. The concerns were quite logical: A steady rise in fixed-income yields naturally reduces the appeal of relatively riskier stocks. But the emerging economic crisis in Europe changes everything. It’s increasingly apparent that European economic troubles are here to stay for quite some time, which is likely to keep a lid on global interest rates. It’s a… Read More

In the early stages of the bull market, investors flocked to companies with steady and growing dividends. Yet, since the market began to think about an eventual rise in interest rates back in May 2013, this asset class has lost a bit of luster. The concerns were quite logical: A steady rise in fixed-income yields naturally reduces the appeal of relatively riskier stocks. But the emerging economic crisis in Europe changes everything. It’s increasingly apparent that European economic troubles are here to stay for quite some time, which is likely to keep a lid on global interest rates. It’s a bit of a goldilocks scenario for the U.S. economy, as low rates will help our economic recovery to expand without a rate rise headwind. You would suspect that the pullback in interest rates would help provide support to dividend-paying stocks, but many of them haven’t been able to escape the recent market rout. If you’ve been tracking divided payers but found their dividend yields to be too skimpy, you’re in luck. The market slump pushed many 2% yielders into the 3% range, many 3% yielders into the 4% range, etc. In the context of falling fixed income yields, such… Read More

Investors are on edge lately as the prospect of higher interest rates threatens their investments in real estate investment trusts, or REITs.  And they have good reason to worry. When the market dropped 5.6% on the taper tantrum in 2013, the Vanguard REIT ETF (NYSE: VNQ) plunged 15.5% over the five-week period, and that was simply from investor sentiment ahead of rising rates.  Not only might investor sentiment hit REITs further, but rising rates could hit the shares from an operational point-of-view as well. While the rest of the market bickers about whether the increase in rates will come in… Read More

Investors are on edge lately as the prospect of higher interest rates threatens their investments in real estate investment trusts, or REITs.  And they have good reason to worry. When the market dropped 5.6% on the taper tantrum in 2013, the Vanguard REIT ETF (NYSE: VNQ) plunged 15.5% over the five-week period, and that was simply from investor sentiment ahead of rising rates.  Not only might investor sentiment hit REITs further, but rising rates could hit the shares from an operational point-of-view as well. While the rest of the market bickers about whether the increase in rates will come in the spring or the summer, nothing short of another economic collapse is going to keep the Fed from raising rates next year.  When it does, REITs could be in for a tough time even against stronger economic growth.  REITs & Rates — A Mixed Bag About the only positive thing you can say about rising interest rates for REITs is that it generally occurs against a strengthening economic backdrop. Economic growth should allow property owners to increase rents and vacancy rates generally come down, especially for commercial property. The problem is that most properties are leased on long-term contracts… Read More

At first glance, China Mobile Ltd (NYSE: CHL), Southwest Airlines Co. (NYSE: LUV) and Ameriprise Financial, Inc. (NYSE: AMP) appear to have nothing in common. But if you dig a little deeper, then you’ll see why they are among the favorite stocks of my colleague Nathan Slaughter. Nathan is the author of StreetAuthority’s Total Yield newsletter, and he has seen each of those stocks rise more than 15% this year since he included them in his portfolio. #-ad_banner-#Their common trait: all three companies produce prodigious amounts of free cash flow, which has enabled them to aggressively buy back shares, pay… Read More

At first glance, China Mobile Ltd (NYSE: CHL), Southwest Airlines Co. (NYSE: LUV) and Ameriprise Financial, Inc. (NYSE: AMP) appear to have nothing in common. But if you dig a little deeper, then you’ll see why they are among the favorite stocks of my colleague Nathan Slaughter. Nathan is the author of StreetAuthority’s Total Yield newsletter, and he has seen each of those stocks rise more than 15% this year since he included them in his portfolio. #-ad_banner-#Their common trait: all three companies produce prodigious amounts of free cash flow, which has enabled them to aggressively buy back shares, pay sprightly dividends, slash their debt — or some combination of all three. Add up the impact of each of those three factors and you derive a Total Yield score. Such shareholder-friendly moves can often goose a stock price. These days, Nathan is in an enviable position. The choppy stock market has pushed the shares of a wide range of quality companies quite far from their 52-week highs. And many of them possess such robust free cash flow that they are now in a position to deliver an impressive Total Yield. Simply put, any company with a great free cash flow… Read More

One of my favorite things about being the Executive Editor here at StreetAuthority is that I get a front-row seat to some of the best financial analysis in the country. I also know from six years of experience in this business that some of our best insight is inspired by you — our subscribers. #-ad_banner-#​We get dozens of emails from readers each and every day. Our paid analysts do a fantastic job of responding to as many of these messages as possible. (Remember, if you have a question or comment on any issue of StreetAuthority… Read More

One of my favorite things about being the Executive Editor here at StreetAuthority is that I get a front-row seat to some of the best financial analysis in the country. I also know from six years of experience in this business that some of our best insight is inspired by you — our subscribers. #-ad_banner-#​We get dozens of emails from readers each and every day. Our paid analysts do a fantastic job of responding to as many of these messages as possible. (Remember, if you have a question or comment on any issue of StreetAuthority Daily, we’d love to hear from you. Send your emails to editorial@StreetAuthority.com.) Every so often, I see a question come in from a reader — along with a response from one of our chief investment strategists — that’s so good it simply has to be shared with a wider audience. The question is about the benefits of monthly dividend payers, and Nathan Slaughter, Chief Strategist of High-Yield Investing, was kind enough to respond… Q. I’m interested in monthly dividend payers. How many stocks pay monthly distributions and can you suggest a good one?… Read More

The king is dead. Long live the king. That cheer seems appropriate in context to the recent commotion of Pimco’s fixed-income guru, Bill Gross, jumping ship for mutual fund competitor Janus Capital Group, Inc. (NYSE: JNS).  While Gross’ move may represent the end of an era in the mutual fund business, more importantly it represents what many pundits have been warning about for quite a while: the official end of the bull market in bonds. As I’ve mentioned in previous writings, I am the furthest thing from a chartist; however, this 25-year study of the yield on the 10-year U.S. Read More

The king is dead. Long live the king. That cheer seems appropriate in context to the recent commotion of Pimco’s fixed-income guru, Bill Gross, jumping ship for mutual fund competitor Janus Capital Group, Inc. (NYSE: JNS).  While Gross’ move may represent the end of an era in the mutual fund business, more importantly it represents what many pundits have been warning about for quite a while: the official end of the bull market in bonds. As I’ve mentioned in previous writings, I am the furthest thing from a chartist; however, this 25-year study of the yield on the 10-year U.S. Treasury really piqued my interest. Is the decades long bond rally over? Probably so. But don’t expect rates to rocket any time soon for many reasons. If this chart is any indication, then yields could be forming a double bottom, revisiting their record lows.  So, if rates are poised to go lower, would that imply that bond prices could trend higher? Would the bond market really have any gas left in the tank? I would have to say: No.  Gross’ exit isn’t the harbinger of the bond bull’s death, it’s a… Read More

Utilities have been one of the top-performing sectors this year, outdistancing the S&P 500 with total returns of better than 13% versus just 6% for the benchmark index. Canadian utilities stocks have also trumped the U.S. equity index with robust 8% returns. As central banks in both Canada and the United States have kept interest rates at historic lows, risk-averse income investors have moved into safe dividend stocks like utilities in lieu of bonds. #-ad_banner-#Despite the gains, Canadian utilities, as represented in the S&P/TSX Capped Utilities Index, still offer an attractive 4.4% average yield — compared with just 3.8% for… Read More

Utilities have been one of the top-performing sectors this year, outdistancing the S&P 500 with total returns of better than 13% versus just 6% for the benchmark index. Canadian utilities stocks have also trumped the U.S. equity index with robust 8% returns. As central banks in both Canada and the United States have kept interest rates at historic lows, risk-averse income investors have moved into safe dividend stocks like utilities in lieu of bonds. #-ad_banner-#Despite the gains, Canadian utilities, as represented in the S&P/TSX Capped Utilities Index, still offer an attractive 4.4% average yield — compared with just 3.8% for their U.S. peers and 1.8% for the S&P 500. As interest rates normalize, bonds could compete with yield plays and also raise the cost of capital for utilities. But central banks rates are expected to raise rates slowly over the next 12 months, by only 50 basis points in Canada and 75 basis points in the United States, according to Bloomberg consensus estimates. Meanwhile, utility stocks should continue to benefit from low interest rates for the foreseeable future. Canadian utilities operate much like those in the United States. As in the Unites States, the rates charged for transmitting and distributing… Read More

One of the strongest themes since the recession has been the remarkable amount of cash returned to shareholders through increased dividend payments. With corporate profits rising, investors hungry for yield are being rewarded for their hard-earned dollars. That is, except for investors in bank stocks. #-ad_banner-#While dividends from companies in the S&P 500 have increased at an annual rate of 4.7% since 2007, dividends paid on the Financial Select Sector SPDR (NYSE: XLF) have declined an annualized 12% over the period. Dividend growth on the financial ETF has picked up, growing… Read More

One of the strongest themes since the recession has been the remarkable amount of cash returned to shareholders through increased dividend payments. With corporate profits rising, investors hungry for yield are being rewarded for their hard-earned dollars. That is, except for investors in bank stocks. #-ad_banner-#While dividends from companies in the S&P 500 have increased at an annual rate of 4.7% since 2007, dividends paid on the Financial Select Sector SPDR (NYSE: XLF) have declined an annualized 12% over the period. Dividend growth on the financial ETF has picked up, growing an annualized 22% over the last three years, but the yield is still a feeble 1.6%. That is under the 1.9% yield on the broader market and well under the 3% yield paid on the fund at the end of 2007. Financials are just now beginning to feel comfortable with increasing their cash payouts and investors may be in for a surprise as the sector boosts its yield over the next year. Acquisitive Growth And  A Strong Yield That Could Go Higher What’s better than increasing sector-level yields? Finding a best-of-breed company that… Read More

Since I launched The Daily Paycheck in December 2009, a number of new securities have come on the market. Many of them have been designed to address the investing challenges specific to our times. For instance, in the United States, the Baby Boomer generation is starting to reach retirement age. For the next twenty years, an average of 10,000 people per day will reach age 65. #-ad_banner-#​When you think about all the new people who will be looking for a way to pay their monthly bills in retirement, it’s not surprising that the number of monthly… Read More

Since I launched The Daily Paycheck in December 2009, a number of new securities have come on the market. Many of them have been designed to address the investing challenges specific to our times. For instance, in the United States, the Baby Boomer generation is starting to reach retirement age. For the next twenty years, an average of 10,000 people per day will reach age 65. #-ad_banner-#​When you think about all the new people who will be looking for a way to pay their monthly bills in retirement, it’s not surprising that the number of monthly dividend-paying securities is also beginning to grow. In this issue, I want to cover a unique fund that pays monthly dividends and offers a much higher-than-average yield. There’s a relatively new bond ETF with a special feature that is designed to protect investors from rising interest rates. It’s called the ProShares High Yield-Interest Rate Hedged ETF (HYHG). Given time, the financial community will find a way to cater to investors’ changing needs. This bond ETF, launched on May 23, 2013, is a… Read More

A tip of the cap is in order for my colleague Andy Obermueller, the author of StreetAuthority’s Game-Changing Stocks newsletter. When I joined forces with Andy and the rest of the team here back in 2010, Andy turned me on to an investment niche that I had never heard of… Read More

You do not get to be one of the world’s wealthiest investors without being able to make some pretty amazing deals. Shares of Berkshire Hathaway (NYSE: BRK-A) have returned an annualized 18.7% over the last three decades and it is in no small thanks to Warren Buffett’s stock market prowess. So when people ask, “Is it possible to beat Buffett at picking stocks?” the answer is usually, “not likely.” #-ad_banner-#​Of course, that is why his advice is so closely followed and why I spend hours every year studying the annual shareholder report he pens for Berkshire… Read More

You do not get to be one of the world’s wealthiest investors without being able to make some pretty amazing deals. Shares of Berkshire Hathaway (NYSE: BRK-A) have returned an annualized 18.7% over the last three decades and it is in no small thanks to Warren Buffett’s stock market prowess. So when people ask, “Is it possible to beat Buffett at picking stocks?” the answer is usually, “not likely.” #-ad_banner-#​Of course, that is why his advice is so closely followed and why I spend hours every year studying the annual shareholder report he pens for Berkshire investors. In his most recent letter, Buffett laid out a set of instructions for his estate and what I saw was shocking — a rare opportunity to set up a portfolio that can beat the Oracle of Omaha. Warren Buffett and the Simplest of Investment Strategies On page 20 of the Berkshire annual report, Buffett lays out a plan for what will happen to a bequest for his wife. “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds… Read More