Investors who were gutsy enough to buy real estate investment trusts (REITs) at the height of the economic crisis in 2008 have been well rewarded. Not only did these REITs see their shares soar from those lows, but they’ve been treated to a surging tide of dividends.#-ad_banner-#​ Case in point: Simon Property Group (NYSE: SPG), the nation’s largest REIT. Its stock has rebounded more than 150% in the past five years, and if you bought Simon back when it traded at $45 in the summer of 2009 and held on,… Read More

Investors who were gutsy enough to buy real estate investment trusts (REITs) at the height of the economic crisis in 2008 have been well rewarded. Not only did these REITs see their shares soar from those lows, but they’ve been treated to a surging tide of dividends.#-ad_banner-#​ Case in point: Simon Property Group (NYSE: SPG), the nation’s largest REIT. Its stock has rebounded more than 150% in the past five years, and if you bought Simon back when it traded at $45 in the summer of 2009 and held on, then today’s $5 annual dividend would work out to be a juicy 9% dividend yield. But this kind of window has most likely closed. Not only has the share price surge pushed the dividend yield down below 3%, but the dividends themselves are no longer growing at an impressive rate. Simon’s Dividend Growth Is Cooling For Simon Property Group, the era of double-digit growth in yields may have come to an end, which is a concern since its dividend yields aren’t all that compelling anyway. Outside the U.S., it’s unclear if REIT dividends will grow any faster,… Read More

Over the past half decade, the exchange-traded fund (ETF) industry has caught the mutual fund industry off-guard. The assets being managed by ETFs have more than doubled in size since 2009, compared with flat growth for their more mature counterparts (though mutual funds still manage more assets overall). #-ad_banner-#​ETFs have proved to be especially popular with investors seeking global exposure. There are now a few hundred country- and region-specific stock and bond ETFs, enabling investors to glean very targeted exposure. For example, as I wrote recently, I think Chile and Vietnam represent sound investment… Read More

Over the past half decade, the exchange-traded fund (ETF) industry has caught the mutual fund industry off-guard. The assets being managed by ETFs have more than doubled in size since 2009, compared with flat growth for their more mature counterparts (though mutual funds still manage more assets overall). #-ad_banner-#​ETFs have proved to be especially popular with investors seeking global exposure. There are now a few hundred country- and region-specific stock and bond ETFs, enabling investors to glean very targeted exposure. For example, as I wrote recently, I think Chile and Vietnam represent sound investment environments.  The appeal of country ETFs is self-evident: They are much cheaper to own than comparable mutual funds, and lower expense ratios can add up to big savings over the short or long haul.  But ETFs also have one major flaw: Their passive portfolios take the good with the bad, as they own a slice of every key company in any given market.  That makes them solid investments if you prefer global themes such as “the Brazilian middle class is growing,” or “South Korean interest rates are set to fall” — but the approach is not so good at drilling… Read More

You can’t keep the Old World down. That’s the conclusion I’ve come to after seeing the big surge over the past two months in European stocks, and particularly the blue-chip stocks of the Euro Stoxx 50 Index.  Since falling to its 2014 low Feb. 3, SPDR Euro Stoxx 50 ETF (NYSE: FEZ) powered nearly 12% higher on heavy buying volume before pulling back slightly. #-ad_banner-#This ETF holds the biggest, and arguably strongest, European companies, including Total (NYSE: TOT), Sanofi (NYSE: SNY), Bayer, Siemens (NYSE: SI) and Banco Santander (NYSE: SAN). FEZ has been a huge… Read More

You can’t keep the Old World down. That’s the conclusion I’ve come to after seeing the big surge over the past two months in European stocks, and particularly the blue-chip stocks of the Euro Stoxx 50 Index.  Since falling to its 2014 low Feb. 3, SPDR Euro Stoxx 50 ETF (NYSE: FEZ) powered nearly 12% higher on heavy buying volume before pulling back slightly. #-ad_banner-#This ETF holds the biggest, and arguably strongest, European companies, including Total (NYSE: TOT), Sanofi (NYSE: SNY), Bayer, Siemens (NYSE: SI) and Banco Santander (NYSE: SAN). FEZ has been a huge winner over the past 12 months, especially relative to stocks in the S&P 500 index, with a total return of nearly 30%. These gains are particularly impressive when you consider that just a few years back, European stocks were largely considered toxic. Who could forget all of those sovereign debt default worries, the social unrest and literal riots in the streets in protest over austerity, a sinking euro and the capital flight away from the region’s equity markets? Well, those things now appear a distant image in the Old World’s rear view mirror. And there looks to be more opportunity… Read More

Some of the best investments are right in front of us every day. Yet they’re often overlooked because they’re so much a part of our daily lives they don’t register with the conscious mind. #-ad_banner-#One area investors may underappreciate is infrastructure — things like telephone poles, towers for wireless communication, substations for electric utilities, and guard rails along roadways, to name just a few. Although infrastructure is the very foundation of society, I suspect it’s probably far from the first thing on investors’ minds.  However, I expect it to be an excellent investment in coming years. In the… Read More

Some of the best investments are right in front of us every day. Yet they’re often overlooked because they’re so much a part of our daily lives they don’t register with the conscious mind. #-ad_banner-#One area investors may underappreciate is infrastructure — things like telephone poles, towers for wireless communication, substations for electric utilities, and guard rails along roadways, to name just a few. Although infrastructure is the very foundation of society, I suspect it’s probably far from the first thing on investors’ minds.  However, I expect it to be an excellent investment in coming years. In the U.S. and other developed countries, infrastructure has been neglected for so long it now needs some heavy-duty overhaul. Many areas of the emerging world have little or no infrastructure at all and will need tremendous amounts put into place for the first time.   According to the McKinsey Global Institute, as much as $67 trillion in spending on infrastructure of all types will be needed worldwide between now and 2030. Roads and power grids will be in greatest demand, followed by water utilities and telecommunication networks, the Institute says. In the U.S., an estimated $2.2 trillion of infrastructure… Read More

In one classic “Seinfeld” episode, Kramer and Newman are embroiled in an epic game of Risk — in which they actually carry the board with them everywhere.  #-ad_banner-#In one scene they’re playing it on the subway. As Kramer rolls the dice, he threatens Newman: “Ukraine is weak!” A Ukrainian national overhears Kramer’s taunt, and things go hilariously south.  Although it’s no laughing matter, I pictured Russian leader Vladimir Putin delivering Kramer’s line as he decided to annex Crimea. All kidding aside, the tensions in Russia have the potential to create some of the most substantial geopolitical risk investors… Read More

In one classic “Seinfeld” episode, Kramer and Newman are embroiled in an epic game of Risk — in which they actually carry the board with them everywhere.  #-ad_banner-#In one scene they’re playing it on the subway. As Kramer rolls the dice, he threatens Newman: “Ukraine is weak!” A Ukrainian national overhears Kramer’s taunt, and things go hilariously south.  Although it’s no laughing matter, I pictured Russian leader Vladimir Putin delivering Kramer’s line as he decided to annex Crimea. All kidding aside, the tensions in Russia have the potential to create some of the most substantial geopolitical risk investors have seen in a decade. Markets are nervously awaiting Putin’s next moves. Aside from the obvious risk to Russia-themed exchange-traded funds (ETFs) — such as iShares MSCI Russia Capped Index Fund (NYSE: ERUS) or the Market Vectors Russia ETF (NYSE: RSX), both of which are off more than 20% this year — many widely held multinationals have substantial downside risk due to large Russian exposure. Exxon Mobil (NYSE: XOM ) This oil supermajor is developing a Siberian drilling project worth a reported potential $500 billion in revenue. Naturally, if conditions worsen, this venture’s future will be jeopardized.   JPMorgan Chase (NYSE: JPM ) The… Read More

In today’s essay, I want to tell you a story about trust and opportunity. You see, when I’m not researching and writing for my premium newsletter, High-Yield International, I also spend time as an independent investment advisor. In that role, to put it bluntly, I make my living by taking clients from big banks. #-ad_banner-#Over the years I have battled all the big names: Bank of America-Merrill Lynch, J.P. Morgan and Northwestern Mutual, to name a few. A recent engagement had me pitted against one of the giants, which shall remain nameless. When I got on the phone with him… Read More

In today’s essay, I want to tell you a story about trust and opportunity. You see, when I’m not researching and writing for my premium newsletter, High-Yield International, I also spend time as an independent investment advisor. In that role, to put it bluntly, I make my living by taking clients from big banks. #-ad_banner-#Over the years I have battled all the big names: Bank of America-Merrill Lynch, J.P. Morgan and Northwestern Mutual, to name a few. A recent engagement had me pitted against one of the giants, which shall remain nameless. When I got on the phone with him to discuss his portfolio, I said, “You are going to learn more from me in the next five minutes than you’ve learned from these guys in the last year.” I heard an awkward chuckle on the other end of the line. But I was completely serious. Five minutes later he wasn’t laughing. In fact, he was enraged. I explained to him that he was: — Overallocated to bonds. — Paying high fees in mutual funds. — In mutual funds that were underperforming the market. — Paying high advisor and execution fees. — Not using special strategies,… Read More

At the trading desks in Sao Paolo, Brazil, you can hear a collective sigh of relief. The country’s Bovespa market index, which had fallen roughly 30% over the two years ended March 1, has finally reversed course. Since early March, this index has rallied more than 10% to above 51,000, boosting the prospects of a range of long-suffering exchange-traded funds (ETFs). #-ad_banner-#Before you can conclude that you’ve missed out on this impressive mini-rally, know that these funds remain far below their multi-year averages. That last ETF, for example, the ProShares Ultra MSCI Brazil… Read More

At the trading desks in Sao Paolo, Brazil, you can hear a collective sigh of relief. The country’s Bovespa market index, which had fallen roughly 30% over the two years ended March 1, has finally reversed course. Since early March, this index has rallied more than 10% to above 51,000, boosting the prospects of a range of long-suffering exchange-traded funds (ETFs). #-ad_banner-#Before you can conclude that you’ve missed out on this impressive mini-rally, know that these funds remain far below their multi-year averages. That last ETF, for example, the ProShares Ultra MSCI Brazil ETF (NYSE: UBR), has rebounded from $32 to $48, but stood above $140 back in 2011. Most of these ETFs trade for less than half of what they traded for back then (though some were launched since then). The real questions are: What’s driving this rebound, and what does it mean for Brazilian stocks for the rest of the year and beyond? The End Of Rate Hikes Brazil’s economy has been throttled by rising interest rates as the government works to halt the advance of inflation, which recently reached 6%. But the cycle of higher rates may… Read More

By 2030, the global middle class is expected to more than double in size from 2 billion to 4.9 billion. That demographic change is going to have a huge impact around the world. #-ad_banner-#For the people who join the middle class, it’s going to mean a significant amount of disposable income for the first time in their lives — allowing them to purchase the luxuries that Westerners have long taken for granted. For investors, it’s important to be aware of not only the fact that the ranks of the middle class are going to swell… but where. Today, half of… Read More

By 2030, the global middle class is expected to more than double in size from 2 billion to 4.9 billion. That demographic change is going to have a huge impact around the world. #-ad_banner-#For the people who join the middle class, it’s going to mean a significant amount of disposable income for the first time in their lives — allowing them to purchase the luxuries that Westerners have long taken for granted. For investors, it’s important to be aware of not only the fact that the ranks of the middle class are going to swell… but where. Today, half of the 2 billion people in the global middle class are from North America and Europe. By 2030, that share is expected to shrink to 22%. On the other hand, Asia is expected to have 64% of the planet’s middle class by 2030. As an investor, I want to make sure that the companies I’m investing in are going to have the wind at their backs for a long time to come. I like companies that benefit from the fact that people are living longer. I like companies that benefit from rising oil prices. And I like companies that are exposed… Read More

Thanks to the highly successful Marshall Plan, which helped many broken European economies get back on their feet after World War II, the U.S. managed to create a massive new market for its exports. Over the next generation, almost every major U.S. firm opened a string of sales offices on the Continent, and for some firms those offices went on to deliver a solid portion of annual sales. #-ad_banner-#But it’s been quite a while since Europe delivered real growth to U.S. firms. Instead, they’ve come to bank on Asia for sales expansion, especially in China and… Read More

Thanks to the highly successful Marshall Plan, which helped many broken European economies get back on their feet after World War II, the U.S. managed to create a massive new market for its exports. Over the next generation, almost every major U.S. firm opened a string of sales offices on the Continent, and for some firms those offices went on to deliver a solid portion of annual sales. #-ad_banner-#But it’s been quite a while since Europe delivered real growth to U.S. firms. Instead, they’ve come to bank on Asia for sales expansion, especially in China and Japan, which collectively account for more than $14 trillion in annual GDP. That’s as much as the seven next largest economies in the world — combined. (That is, except for the U.S., which generates more than $16 trillion in annual GDP.) These days, China and Japan are causing U.S. executives all kinds of headaches. Each country has a unique and growing set of problems. A few bad breaks could lead to serious headaches for regional sales offices. China Back in January, I noted that rising wages and a shaky banking sector were threatening to end China’s impressive string of… Read More

Last summer, I wrote about an odd disconnect between rising oil prices and a strong U.S. dollar. Since then, that disconnect has dissipated. The dollar has appreciated about 6% to 7%, and inversely, the price of West Texas Intermediate crude (WTI) has fallen at about the same rate. Two of my recommendations, Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX), have gone up an average of 32%. The third recommendation was integrated Brazilian oil producer Petroleo Brasilero (NYSE: PBR),aka Petrobras. Since then, the stock has fallen 26%. Do I still like it? More than ever. Another BRIC Faces… Read More

Last summer, I wrote about an odd disconnect between rising oil prices and a strong U.S. dollar. Since then, that disconnect has dissipated. The dollar has appreciated about 6% to 7%, and inversely, the price of West Texas Intermediate crude (WTI) has fallen at about the same rate. Two of my recommendations, Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX), have gone up an average of 32%. The third recommendation was integrated Brazilian oil producer Petroleo Brasilero (NYSE: PBR),aka Petrobras. Since then, the stock has fallen 26%. Do I still like it? More than ever. Another BRIC Faces Adversity Not long ago, Brazil and its fellow BRIC nations were the world’s fastest-growing emerging-market economies. Now? Not so much. Each country has its own challenges. Brazil, in particular, is facing unemployment, a weak currency, inflation, and pockets of social unrest. The currency weakness is one factor affecting Petrobras’ stock price. Others include below-forecast oil production and low domestic fuel prices. But the low stock price doesn’t tell the whole story. Petrobras is one of the world’s largest oil and gas companies in all aspects of exploration, production, refining, transportation and marketing (thus the moniker “vertically integrated” oil company). Read More