We’re approaching the 20th anniversary of an historic agreement, and its impact is roiling global markets today, with potentially profound effects by 2017. That landmark move: The European Central Bank’s (ECB) decision in 1995 to establish a single, continent-wide currency. When the euro finally began circulating (replacing drachmas, guilders, marks, francs, pesetas and many other currencies) in 1999, it was worth exactly one U.S. dollar. The ECB’s goal: to eventually see the euro become a leading global currency that would attract more than its share of capital flows. #-ad_banner-#That plan may have worked too well: by the… Read More

We’re approaching the 20th anniversary of an historic agreement, and its impact is roiling global markets today, with potentially profound effects by 2017. That landmark move: The European Central Bank’s (ECB) decision in 1995 to establish a single, continent-wide currency. When the euro finally began circulating (replacing drachmas, guilders, marks, francs, pesetas and many other currencies) in 1999, it was worth exactly one U.S. dollar. The ECB’s goal: to eventually see the euro become a leading global currency that would attract more than its share of capital flows. #-ad_banner-#That plan may have worked too well: by the spring of 2008, the euro was worth more than $1.50, which was arguably too rich an exchange rate for many weaker European economies, some of which became among the most expensive places in the world to do business. The Great Recession of 2008 put an end to all that. The euro has been in freefall ever since, and a pair of economic research teams predict that the euro will keep on sliding until it gets all the way back to parity. In August 2014, when the euro was already breaking down to the 1.30 level, economists… Read More

The new year hasn’t been kind to investors. In the first two weeks of January, the S&P 500 Index dropped 2.3% and every trading day has been filled with drama. #-ad_banner-#What started as a precipitous drop in oil prices — primarily driven by increased supply, the increased relative value of the U.S. dollar and speculators’ margin calls — has morphed into uncertainty about the strength of the global economy. And the one thing that the market hates is uncertainty. It’s not easy to make decisions and take action in a pessimistic and uncertain market. Read More

The new year hasn’t been kind to investors. In the first two weeks of January, the S&P 500 Index dropped 2.3% and every trading day has been filled with drama. #-ad_banner-#What started as a precipitous drop in oil prices — primarily driven by increased supply, the increased relative value of the U.S. dollar and speculators’ margin calls — has morphed into uncertainty about the strength of the global economy. And the one thing that the market hates is uncertainty. It’s not easy to make decisions and take action in a pessimistic and uncertain market. But it’s often the tough decisions that allow us to sleep better at night. Here are some of the things I focus on in times like this: Evaluate Your Cash Balance As investors, we have been made to feel guilty about holding cash. It’s as if we’re shirking our responsibilities. We feel like we should always have our entire portfolio working for us. But cash does work for us. Cash holds up pretty darn well in a downturn. Cash helps us sleep better at night, no matter what the market throws at us. Cash allows… Read More

  When analysts and pundits start talking about a bubble, most investors shrug it off as the usual market sensationalism.   #-ad_banner-#When a member of the Federal Reserve Board starts talking about a bubble, you may want to sit up and take notice. And when it is a bubble in the world’s most liquid investment, which serves as a benchmark for pricing in the $67 trillion global market for bonds, you may even want to start thinking about worst-case scenarios.   In fact, things have gotten so far out of whack that volatility in this “safe-haven” investment is now higher… Read More

  When analysts and pundits start talking about a bubble, most investors shrug it off as the usual market sensationalism.   #-ad_banner-#When a member of the Federal Reserve Board starts talking about a bubble, you may want to sit up and take notice. And when it is a bubble in the world’s most liquid investment, which serves as a benchmark for pricing in the $67 trillion global market for bonds, you may even want to start thinking about worst-case scenarios.   In fact, things have gotten so far out of whack that volatility in this “safe-haven” investment is now higher than volatility for stocks in the S&P 500.   Is This The Single-Biggest Threat To The Market? The market for U.S. government debt tops $12.5 trillion, the most liquid of any investment and the benchmark for all other bond rates. The market for treasuries serves as a quick pricing mechanism for  other bonds and is known as the safe-haven investment in times of volatility.   But something has changed in the market for U.S. government debt, and the consequences could shock global markets. What’s worse, no one is talking about it.   From my viewpoint, it might… Read More

One of the most remarkable aspects of the past half-decade has been a complete lack of change. Year after year, the economy grew at a subpar pace, inflation remained subdued and stocks have bounded ever higher. Simply owning a cross section of industries yielded solid annual results. #-ad_banner-#Yet in just the first five weeks of 2015, it’s become increasingly clear that we’ve busted out of the same old, same old. Across the global economy, major changes are afoot. And investors can no longer hang back and let the market simply work its magic. It’s time for a more active approach… Read More

One of the most remarkable aspects of the past half-decade has been a complete lack of change. Year after year, the economy grew at a subpar pace, inflation remained subdued and stocks have bounded ever higher. Simply owning a cross section of industries yielded solid annual results. #-ad_banner-#Yet in just the first five weeks of 2015, it’s become increasingly clear that we’ve busted out of the same old, same old. Across the global economy, major changes are afoot. And investors can no longer hang back and let the market simply work its magic. It’s time for a more active approach to portfolio management. Here are five key stats that explain why 2015 is already quite distinct from 2014. Rig Count The fallout from plunging oil prices began to be felt two-to-three months ago, but we’re just getting started. Consumers have been inclined to save the windfall thus far, but may be emboldened to start spending more once their bank accounts are sturdy enough. Meanwhile, capital spending and employment levels in the U.S. energy industry are only now starting to feel the impact, a trend which should strengthen with each passing quarter. The number of oil and gas rigs in… Read More

All major U.S. indices closed in positive territory last week, reversing the previous week’s negative closes, led by the Dow Jones Industrial Average, which gained 3.8%. This good one-week showing was enough to nudge the industrials into positive territory for 2015; the index is up just over one point year-to-date, for a return of 0.01%. All other major indices are still in negative territory for 2015, except for the small-cap Russell 2000, which is now up 0.1%. I’ll discuss this market-leading index in more detail later in today’s report. #-ad_banner-#​Back in the Jan. 19 Market Outlook,… Read More

All major U.S. indices closed in positive territory last week, reversing the previous week’s negative closes, led by the Dow Jones Industrial Average, which gained 3.8%. This good one-week showing was enough to nudge the industrials into positive territory for 2015; the index is up just over one point year-to-date, for a return of 0.01%. All other major indices are still in negative territory for 2015, except for the small-cap Russell 2000, which is now up 0.1%. I’ll discuss this market-leading index in more detail later in today’s report. #-ad_banner-#​Back in the Jan. 19 Market Outlook, I pointed out that my own ETF-based metric showed the biggest one-week inflow of investor assets was into energy, and that, should this expansion in assets continue, it would “suggest an emerging buying opportunity in this unloved and washed-out sector.” This expansion of assets into energy has indeed continued, as my metric now shows that the biggest inflow of sector bet-related assets over the past one-week, three-week and three-month periods have all been into that sector. Meanwhile, the Energy Select Sector SPDR ETF (NYSE: XLE) has already outperformed the SPDR S&P 500 ETF (NYSE: SPY) by 4.2 percentage points since… Read More

  Consumer spending in emerging markets has been growing at three times the rate of the growth seen in developed economies, according to consulting firm McKinsey & Co.   #-ad_banner-#That trend has compelled many U.S. companies to steadily expand their sales footprint in these economies. The net result:  foreign sales at companies in the S&P 500 rose to more than 50% of sales today, from 30% of total sales in 2000.   But the outperforming U.S. economy and the strong dollar has thrown a wrench in those plans. Foreign earnings have hit U.S. companies as international markets lag and weaker… Read More

  Consumer spending in emerging markets has been growing at three times the rate of the growth seen in developed economies, according to consulting firm McKinsey & Co.   #-ad_banner-#That trend has compelled many U.S. companies to steadily expand their sales footprint in these economies. The net result:  foreign sales at companies in the S&P 500 rose to more than 50% of sales today, from 30% of total sales in 2000.   But the outperforming U.S. economy and the strong dollar has thrown a wrench in those plans. Foreign earnings have hit U.S. companies as international markets lag and weaker currencies get translated into fewer dollars every quarter.   The Procter & Gamble Company’s (NYSE: PG) CFO Jon Moeller pointed to foreign exchange as the primary challenge facing the company and the reason it missed earnings expectations by 6% in the most recent fourth quarter. The company books two-thirds of its sales from outside the United States.  Foreign exchange could reduce 2015 sales by as much as 5% at P&G and lead to a 12% hit to earnings.   Shares of Pfizer, Inc. (NYSE: PFE) slid after the company reported a 3.5% decline in earnings in 2014, thanks to a… Read More

For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. #-ad_banner-#I first picked up poker about a decade ago, well before it was all over television. But I wasn’t after the big jackpot like most of the people who’ve taken up the game. I simply thought poker could make me a better investor. Poker has a lot in common with investing — and no, I’m not talking about luck. In poker, you get only one move at a time. Read More

For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. #-ad_banner-#I first picked up poker about a decade ago, well before it was all over television. But I wasn’t after the big jackpot like most of the people who’ve taken up the game. I simply thought poker could make me a better investor. Poker has a lot in common with investing — and no, I’m not talking about luck. In poker, you get only one move at a time. You don’t get the luxury of making your moves in a vacuum or without consideration for the dynamics other players bring to the game. It also takes patience and foresight to win consistently. And sometimes, it’s not about winning, but simply knowing when to cut your losses. When put in those terms, it’s easy to see how playing poker can make you a better investor. It’s easy to spot an inexperienced player at a poker table. He’ll be the guy who plays nearly every hand. He’s probably grown up watching televised poker, where folded… Read More

I must say, I really enjoy what I do. #-ad_banner-#I’m fortunate enough to be able to analyze some of the most interesting companies, and detail that analysis in my premium newsletter, Maximum Profit. This allows me to mix my two favorite hobbies: investment analysis and writing. I thought I couldn’t ask for anything better… That is, until I met StreetAuthority’s very own Dave Forest. If you’ve never had the chance to read any of Dave’s premium analysis, then you’re missing out. Not only does he offer incredible in-depth research you can’t… Read More

I must say, I really enjoy what I do. #-ad_banner-#I’m fortunate enough to be able to analyze some of the most interesting companies, and detail that analysis in my premium newsletter, Maximum Profit. This allows me to mix my two favorite hobbies: investment analysis and writing. I thought I couldn’t ask for anything better… That is, until I met StreetAuthority’s very own Dave Forest. If you’ve never had the chance to read any of Dave’s premium analysis, then you’re missing out. Not only does he offer incredible in-depth research you can’t find anywhere else, but you also get some of the best stories. I like to think of him as the Indiana Jones of the investing world. Seriously, just look at this excerpt from a recent edition of his premium advisory Scarcity & Real Wealth:         I’ve doused my boots with rancid-smelling liquid — intended to ward off deadly coral snakes that lurk in the pools and swamps where I was treading. I’ve climbed to mountain peaks near 10,000 feet — where the lungs start to put up serious resistance to… Read More

As many of my long-time readers know, I generally like to have my portfolio holdings equally split among three types of dividend stocks: High-Yield Opportunities, Fast Dividend Growers and Steady Income Generators. (I talked in more detail about each of these in a recent issue of StreetAuthority Daily.) #-ad_banner-#The critical discovery I’ve made over the past five years is that by using the right combination of dividend stocks, you can you create a retirement portfolio that maximizes income, maximizes growth and minimizes risk. This is exactly what my Daily Paycheck Retirement Strategy is all… Read More

As many of my long-time readers know, I generally like to have my portfolio holdings equally split among three types of dividend stocks: High-Yield Opportunities, Fast Dividend Growers and Steady Income Generators. (I talked in more detail about each of these in a recent issue of StreetAuthority Daily.) #-ad_banner-#The critical discovery I’ve made over the past five years is that by using the right combination of dividend stocks, you can you create a retirement portfolio that maximizes income, maximizes growth and minimizes risk. This is exactly what my Daily Paycheck Retirement Strategy is all about. It’s how I’ve been able to collect more than $1,500 per month in dividends over the past year, and how my real-money portfolio has grown from $200,000 to over $315,000 in just a little more than five years. As I said, the strategy uses three types of dividend stocks. But to maximize income, my Daily Paycheck Strategy dedicates nearly a third of its portfolio to high-yield dividend stocks. I doubt I need to tell you the primary benefit of this elite category. But high-yielding securities are defined by their generous income payouts, making… Read More

Working for StreetAuthority, I do a lot of different things. #-ad_banner-#In the course of a day, I may be writing an article… discussing potential picks with our staff… researching the next investing hotspot… even going over Stock of the Month ideas with my colleagues. And with so much going on, I actually find myself a little frazzled as the day goes on. To combat this, I try to get to work about an hour earlier than the rest of the staff. Sometimes I simply work from home before I get into… Read More

Working for StreetAuthority, I do a lot of different things. #-ad_banner-#In the course of a day, I may be writing an article… discussing potential picks with our staff… researching the next investing hotspot… even going over Stock of the Month ideas with my colleagues. And with so much going on, I actually find myself a little frazzled as the day goes on. To combat this, I try to get to work about an hour earlier than the rest of the staff. Sometimes I simply work from home before I get into the office. I don’t do this to show off. I’ve simply found I can do more in that one hour (when I can simply focus on one task without distraction) than I can in two hours when the rest of the staff has the office buzzing. Turning off the background noise allows me to simplify things — and get better results. What does this have to do with investing? A ton. Why Diversification Is Like Drinking From a Fire Hose Sometimes the investing waters are as clear as mud to… Read More