In November, I told you about a company I suggested as The Market‘s Next Big Turnaround Story. And if ever a company had room to turn around, then it was this Silicon Valley stalwart. Its stock peaked at $108 a share on the last day of 1999. Then came the “Dot-com” bust. Within two years the shares had fallen to a low of $8. Most… Read More

In November, I told you about a company I suggested as The Market‘s Next Big Turnaround Story. And if ever a company had room to turn around, then it was this Silicon Valley stalwart. Its stock peaked at $108 a share on the last day of 1999. Then came the “Dot-com” bust. Within two years the shares had fallen to a low of $8. Most of the ensuing decade has been spent playing catch-up to a new wave of competitors. The brand was — and still is — iconic. But in recent years, shares have floundered. And since 2008 the company has chewed up and spit out four CEOs. Then, this past July, the company “got what it wanted,” in the words of Amy Calistri, chief investment strategist for Stock of the Month. Amid much fanfare, Yahoo! (Nasdaq: YHOO) named as its… Read More

Have you ever been traveling somewhere and opted for a scenic route to make your trip more enjoyable? Many of the world’s savviest investors also travel a different path in an effort to avoid a lackluster performance in their investments.#-ad_banner-# Because they are willing to go off the beaten path in the quest for superior returns, they follow a different set of rules. That’s why many of these investors want to get paid two ways — with capital appreciation (buy low, sell high) and… Read More

Have you ever been traveling somewhere and opted for a scenic route to make your trip more enjoyable? Many of the world’s savviest investors also travel a different path in an effort to avoid a lackluster performance in their investments.#-ad_banner-# Because they are willing to go off the beaten path in the quest for superior returns, they follow a different set of rules. That’s why many of these investors want to get paid two ways — with capital appreciation (buy low, sell high) and cash flow (dividends). To accomplish this, they often seek out investment opportunities few know about. We at StreetAuthority like to call these kinds of investments “Secret Wealth Investments.“ These “Secret Wealth Investments” go largely ignored by the average investor. They’re not overly sexy and they don’t get many headlines in the financial press, but they pay some of the market‘s best dividends. In fact, some of these “Secret Wealth Investments” are FORCED… Read More

Real estate investment trusts (REITs) can add diversification, stability and generous yields to any portfolio. This is particularly true this year, with the REIT sector returning nearly 18%, as a result of the improving real estate market. The fact that REITs have no risk of dividend tax hikes related to the “fiscal cliff” makes them even more appealing… Read More

Real estate investment trusts (REITs) can add diversification, stability and generous yields to any portfolio. This is particularly true this year, with the REIT sector returning nearly 18%, as a result of the improving real estate market. The fact that REITs have no risk of dividend tax hikes related to the “fiscal cliff” makes them even more appealing investments. This is because REITs never qualified for the Bush-era dividend tax cuts. Instead, REITs benefit from no corporate income tax, which results in higher dividend payments for investors. This also reduces the cost basis of the initial investment, since the dividends aren’t taxed until shares are sold.#-ad_banner-# A downside to the strong performance in the REIT sector this year has been gradually-declining yields. At present, retail REITs… Read More

Billionaire bond manager Bill Gross calls it the “new normal.” Most economists agree with him. And it’s changing the way many people invest. In the past 30 years, the U.S. economy has seen an unprecedented expansion, driven by productivity and credit gains. But now that the debt party is ending, the consensus among economists is for an extended period of slower growth.#-ad_banner-# Slower growth will make it harder… Read More

Billionaire bond manager Bill Gross calls it the “new normal.” Most economists agree with him. And it’s changing the way many people invest. In the past 30 years, the U.S. economy has seen an unprecedented expansion, driven by productivity and credit gains. But now that the debt party is ending, the consensus among economists is for an extended period of slower growth.#-ad_banner-# Slower growth will make it harder for the country to pay its debt.  Since the early 1800s there have been 26 instances of debt-to-GDP going above 90%. Multiple leading economist found that when the debt-to-GDP ratio goes that high, growth is typically reduced by an average of 1%.  This is a troubling sign for the U.S. economy. Our ratio just passed the 100% mark. Another devastating effect of too much debt is the duration of slow growth. In 20 of the 26 cases studied, slower growth lasted for more than… Read More

As I’ve said many times before, investors can find plenty of rich yields in telecom stocks. Predictable subscriber demand gives these companies plenty of cash flow to support high dividends. In addition, telecom companies currently benefit from the rollout of the 4G technology, which is exponentially expanding data usage. In an earlier article, I listed the highest-yielding stocks by industry and a few telecoms I considered suitable candidates for further research. But it’s important to take a closer look at these stocks, simply because a high… Read More

As I’ve said many times before, investors can find plenty of rich yields in telecom stocks. Predictable subscriber demand gives these companies plenty of cash flow to support high dividends. In addition, telecom companies currently benefit from the rollout of the 4G technology, which is exponentially expanding data usage. In an earlier article, I listed the highest-yielding stocks by industry and a few telecoms I considered suitable candidates for further research. But it’s important to take a closer look at these stocks, simply because a high yield doesn’t necessarily mean high quality. Buying a stock based on its yield alone is extremely risky. Just as you would never buy a car without looking under the hood, you should never buy a stock without evaluating all of its fundamentals. My closer look at the highest-yielding telecom stocks revealed several potential values and a few high-risk dividend traps. Here they are… 1. Portugal Telecom Yield: 14.6% Portugal Telecom (NYSE: PT), the largest telecom operator in Portugal has been… Read More

Over the past few months, I have written extensively about the “new normal” in income investing. You see, as one of StreetAuthority’s leading income investing experts, it’s my obligation to let you know when the rules have changed. #-ad_banner-#​Nonetheless, I consistently get emails from readers, asking me where all of the high yielders have gone. “You are getting away from income investor basics. I am not interested in “total [yield]” or stocks with less than 7%-8% dividends.” — George W., North Carolina I want to devote… Read More

Over the past few months, I have written extensively about the “new normal” in income investing. You see, as one of StreetAuthority’s leading income investing experts, it’s my obligation to let you know when the rules have changed. #-ad_banner-#​Nonetheless, I consistently get emails from readers, asking me where all of the high yielders have gone. “You are getting away from income investor basics. I am not interested in “total [yield]” or stocks with less than 7%-8% dividends.” — George W., North Carolina I want to devote today’s issue to address George’s email, because understanding the reality about income investing in today’s market can mean the difference between market-beating returns and financial ruin. I understand that many of you, like George, want to see me recommend 10%-plus yielders each month — to which I can only respond, so do I. Unfortunately, high-quality stocks with yields even half this high are extremely rare. That’s because, right now, aside from historically low interest rates, American companies are undergoing a transformative shift away from dividends in favor of share repurchases. Don’t get… Read More

There’s no doubt about it, interest rates are rising. Now, they’re obviously not soaring and their upward journey certainly hasn’t been linear. But at 2.4%, the yield on the benchmark 10-year Treasury bond is substantially above its mid-2012 low of 1.5%. It even spiked briefly to just over 3% at the beginning of the year. And interest rates will most likely continue trending higher, what with the Federal Reserve set to end its rate-suppressing QE (quantitative easing) program next month. There’s also a good chance of the Fed looking to actively raise interest rates next year in what… Read More

There’s no doubt about it, interest rates are rising. Now, they’re obviously not soaring and their upward journey certainly hasn’t been linear. But at 2.4%, the yield on the benchmark 10-year Treasury bond is substantially above its mid-2012 low of 1.5%. It even spiked briefly to just over 3% at the beginning of the year. And interest rates will most likely continue trending higher, what with the Federal Reserve set to end its rate-suppressing QE (quantitative easing) program next month. There’s also a good chance of the Fed looking to actively raise interest rates next year in what would be its first rate hike in around eight years. Most investors have been dreading this eventuality because it’s apt to inflict some near-term pain. Indeed, rate hikes can push down the value of existing bonds because new debt is issued with larger coupons. Rising rates could also trigger a selloff in stocks because of concern about higher borrowing costs for companies, among other things. Ultimately, though, higher interest rates should spell opportunity — especially for conservative income investors. For years now, they’ve had to be willing to take a lot of extra risk just to… Read More

A little-noticed milestone took place in the just-completed earnings season. After 17 straight quarters of sequentially stronger earnings, banking giant Wells Fargo & Co. (NYSE: WFC) saw its per share profits fall a few pennies. It’s safe to say that all of the margin gains that have been delivered from streamlining after the 2008 financial crisis have been wrung out. The top line isn’t looking much brighter: Wells Fargo is expected to boost revenue by less than 1% this year. To get the top and bottom line moving higher, Wells Fargo announced a bold move: It aims to spend $100… Read More

A little-noticed milestone took place in the just-completed earnings season. After 17 straight quarters of sequentially stronger earnings, banking giant Wells Fargo & Co. (NYSE: WFC) saw its per share profits fall a few pennies. It’s safe to say that all of the margin gains that have been delivered from streamlining after the 2008 financial crisis have been wrung out. The top line isn’t looking much brighter: Wells Fargo is expected to boost revenue by less than 1% this year. To get the top and bottom line moving higher, Wells Fargo announced a bold move: It aims to spend $100 billion to acquire niche financial service firms, known as asset managers. These are mutual fund firms, operators of exchange-traded funds (ETFs), retirement plan sponsors and pension management firms, which as a group hold trillions in Assets Under Management (AUM). Indeed, you can expect to hear a lot more of the term AUM in coming years, as Wells Fargo is likely just the first of several major banks that want to build up their asset base. Why AUM, and why now? In recent years, partially due… Read More

Let me start with a simple confession — I love luxury hotels. There’s simply nothing like a great living space to make you feel like a million dollars when on vacation or business. I can still remember vividly the thrill I had when I last got a luxury room a few years ago at the Ritz-Carlton hotel. That time when the bellboy led me down the hall and swiped the special card for the doors that led into the coveted presidential suite. The room didn’t disappoint. The wall-to-wall marble and gold trim were immediately… Read More

Let me start with a simple confession — I love luxury hotels. There’s simply nothing like a great living space to make you feel like a million dollars when on vacation or business. I can still remember vividly the thrill I had when I last got a luxury room a few years ago at the Ritz-Carlton hotel. That time when the bellboy led me down the hall and swiped the special card for the doors that led into the coveted presidential suite. The room didn’t disappoint. The wall-to-wall marble and gold trim were immediately eye-catching. The furniture was immaculate and perfectly laid out. The kitchen and bar were fully stocked. It was paradise with a card key. #-ad_banner-#I enjoyed those days immensely. In fact, I didn’t leave the room much — instead having people come up for meetings in the lavish sitting area. I remember one incident where a guest asked if he could smoke in the room — and upon phoning the front desk, I was told, “Sir, you can do whatever you like.” This feeling is the power of the luxury brand. It’s not hard to… Read More

Once upon a time, high dividend yields were plentiful… so much so that they may have been taken for granted. And now, the tired adage, “You never know how good something is, until it’s gone” has never been more true. For the past few years, the market has been trending away from high-yield dividend payments. As I wrote recently in Dividend Opportunities, just seven stocks in the S&P 500 carry a dividend yield over 6%. On top of that, the average yield for S&P 500 companies is a measly 1.96%. But I’d like to… Read More

Once upon a time, high dividend yields were plentiful… so much so that they may have been taken for granted. And now, the tired adage, “You never know how good something is, until it’s gone” has never been more true. For the past few years, the market has been trending away from high-yield dividend payments. As I wrote recently in Dividend Opportunities, just seven stocks in the S&P 500 carry a dividend yield over 6%. On top of that, the average yield for S&P 500 companies is a measly 1.96%. But I’d like to remind you that just because high-yields are increasingly scarce in today’s market doesn’t mean you have to settle. #-ad_banner-#​What I am getting at is that while high-yields are nice, they aren’t the end-all, be-all of dividend investing. To frame our conversation, let me pose this question: Would you rather have a stagnant 7% yield or a 5% yield that grows by 10% every year? While on its face a high dividend yield is very attractive, growing dividends can turn even lower-yielding stocks into big income producers over time. To see what I mean, look… Read More