Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. As you can see in the chart below, something changed in 1951, and bond yields topped dividend yields for the next 60 years. In November 2011, the relationship reverted back to its historical alignment, and stock market yields have been at least slightly above bond yields ever since. This relationship is important to income investors because asset allocation rules have been developed based on the data. Many retirement investors have learned that a balanced portfolio should be 60%… Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. Read More

Income-starved investors are faced with bleak prospects. Stocks in the S&P 500 index might only reward investors with a dividend yield of 2% or so over the next 12 months. As an alternative, investors could consider 10-year Treasury notes, but those pay even less. Based on history and very long-term charts, stocks do seem like the better choice. Prior to 1951, stocks offered investors more income than bonds. As you can see in the chart below, something changed in 1951, and bond yields topped dividend yields for the next 60 years. In November 2011, the relationship reverted back to its historical alignment, and stock market yields have been at least slightly above bond yields ever since. This relationship is important to income investors because asset allocation rules have been developed based on the data. Many retirement investors have learned that a balanced portfolio should be 60%… Read More

When discussing the financial markets with fellow investors, I am often asked, “What book has had the most impact on your investing philosophy?” Without hesitation, I answer, “Triumph of the Optimists.” This 2002 book isn’t a how-to on investing or trading. Rather, it’s a treatise on the investment returns over the entire 20th century. The book has had a profound effect on the way I view the stock market. Read More

When discussing the financial markets with fellow investors, I am often asked, “What book has had the most impact on your investing philosophy?” Without hesitation, I answer, “Triumph of the Optimists.” This 2002 book isn’t a how-to on investing or trading. Rather, it’s a treatise on the investment returns over the entire 20th century. The book has had a profound effect on the way I view the stock market. This little-known book radically altered my thinking from focusing exclusively on narrow short-term results to a broad-based long-term view.#-ad_banner-# In other words, it has allowed me to see the forest rather than just the trees. It is through this prism that I feel confident in making this bold market prediction. “Triumph of the Optimists” looks at 101 years of global investment returns and teaches what is, to my thinking, the correct way to measure returns over time. What I found most profound is that from 1900 to 2000, in terms of returns,… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of events caught the markets by surprise, and more surprises probably lie ahead. For example, of the four potential “black swans” I described at the start of this year, one has already come to pass. Yet we can still identify other events that have a decent chance of playing out, with profits or losses to follow close behind. Here are five themes I’m monitoring closely in this year’s second half. 1. U.S. natural gas exports get the green light In recent years, companies have laid out plans to build… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of events caught the markets by surprise, and more surprises probably lie ahead. For example, of the four potential “black swans” I described at the start of this year, one has already come to pass. Yet we can still identify other events that have a decent chance of playing out, with profits or losses to follow close behind. Here are five themes I’m monitoring closely in this year’s second half. 1. U.S. natural gas exports get the green light In recent years, companies have laid out plans to build… Read More

You hear about it often. A company buys back its own stock. The right way to do this — good for long-term holders of shares — is called a tontine. We’ll look at six tontines down below. But first, what is it? It may sound like a French pastry, but the tontine is a legal and (non-fattening) tactic for amassing riches. We have Lorenzo de Tonti to thank for it.#-ad_banner-# The year is 1652. The place: France. King Louis XIV broods… Read More

You hear about it often. A company buys back its own stock. The right way to do this — good for long-term holders of shares — is called a tontine. We’ll look at six tontines down below. But first, what is it? It may sound like a French pastry, but the tontine is a legal and (non-fattening) tactic for amassing riches. We have Lorenzo de Tonti to thank for it.#-ad_banner-# The year is 1652. The place: France. King Louis XIV broods on his throne. The French treasury is bare. Meanwhile, there is an ongoing war with Spain, and he needs money. Enter Lorenzo de Tonti, a banker from Naples. Tonti has an idea. “Let us have citizens invest in shares of a government-run pool,” Tonti suggests. “We will pay regular dividends to them from the pool. But they cannot transfer or sell their shares. And when they die, they lose their shares. We cancel them.” Tonti continues: “We promise to pay the same amount regardless of how many… Read More

They say it’s better to learn from others’ mistakes than to have to go through the agony of learning the hard way. So we wondered what can be learned from some of the biggest investing mistakes in history. In recent years, we’ve seen plenty of Wall Street scams fall apart. Many of these scams have bilked investors out of billions of dollars. #-ad_banner-# We’d like to say that those who have been duped deserve their fate. After all, some of them are… Read More

They say it’s better to learn from others’ mistakes than to have to go through the agony of learning the hard way. So we wondered what can be learned from some of the biggest investing mistakes in history. In recent years, we’ve seen plenty of Wall Street scams fall apart. Many of these scams have bilked investors out of billions of dollars. #-ad_banner-# We’d like to say that those who have been duped deserve their fate. After all, some of them are so amateurish or commonly known now that it makes you wonder how anyone could fall for them anymore. (Take the Nigerian email scam, for example.) However, the reality is that some of these scams are rather sophisticated. They often appear to be official or legitimate. And many of them succeed for years. And yes, even you might fall for a scam, no matter how careful you are. But to reduce the chances of being taken in by a Wall Street scam, here is a rundown of the five biggest Wall Street scams, and what… Read More

You hear about it often. A company buys back its own stock. The right way to do this — good for long-term holders of shares — is called a tontine. We’ll look at six tontines down below. But first, what is it? It may sound like a French pastry, but the tontine is a legal and (non-fattening) tactic for amassing riches. We have Lorenzo de Tonti to thank for it.#-ad_banner-# The year is 1652. The place: France. King Louis XIV broods… Read More

You hear about it often. A company buys back its own stock. The right way to do this — good for long-term holders of shares — is called a tontine. We’ll look at six tontines down below. But first, what is it? It may sound like a French pastry, but the tontine is a legal and (non-fattening) tactic for amassing riches. We have Lorenzo de Tonti to thank for it.#-ad_banner-# The year is 1652. The place: France. King Louis XIV broods on his throne. The French treasury is bare. Meanwhile, there is an ongoing war with Spain, and he needs money. Enter Lorenzo de Tonti, a banker from Naples. Tonti has an idea. “Let us have citizens invest in shares of a government-run pool,” Tonti suggests. “We will pay regular dividends to them from the pool. But they cannot transfer or sell their shares. And when they die, they lose their shares. We cancel them.” Tonti continues: “We promise to pay the same amount regardless of how many… Read More

They say it’s better to learn from others’ mistakes than to have to go through the agony of learning the hard way. So we wondered what can be learned from some of the biggest investing mistakes in history. In recent years, we’ve seen plenty of Wall Street scams fall apart. Many of these scams have bilked investors out of billions of dollars. #-ad_banner-# We’d like to say that those who have been duped deserve their fate. After all, some of them are… Read More

They say it’s better to learn from others’ mistakes than to have to go through the agony of learning the hard way. So we wondered what can be learned from some of the biggest investing mistakes in history. In recent years, we’ve seen plenty of Wall Street scams fall apart. Many of these scams have bilked investors out of billions of dollars. #-ad_banner-# We’d like to say that those who have been duped deserve their fate. After all, some of them are so amateurish or commonly known now that it makes you wonder how anyone could fall for them anymore. (Take the Nigerian email scam, for example.) However, the reality is that some of these scams are rather sophisticated. They often appear to be official or legitimate. And many of them succeed for years. And yes, even you might fall for a scam, no matter how careful you are. But to reduce the chances of being taken in by a Wall Street scam, here is a rundown of the five biggest Wall Street scams, and what… Read More

They say it’s better to learn from others’ mistakes than to have to go through the agony of learning the hard way. So we wondered what can be learned from some of the biggest investing mistakes in history. In recent years, we’ve seen plenty of Wall Street scams fall apart. Many of these scams have bilked investors out of billions of dollars. #-ad_banner-# We’d like to say that those who have been duped deserve their fate. After all, some of them are… Read More

They say it’s better to learn from others’ mistakes than to have to go through the agony of learning the hard way. So we wondered what can be learned from some of the biggest investing mistakes in history. In recent years, we’ve seen plenty of Wall Street scams fall apart. Many of these scams have bilked investors out of billions of dollars. #-ad_banner-# We’d like to say that those who have been duped deserve their fate. After all, some of them are so amateurish or commonly known now that it makes you wonder how anyone could fall for them anymore. (Take the Nigerian email scam, for example.) However, the reality is that some of these scams are rather sophisticated. They often appear to be official or legitimate. And many of them succeed for years. And yes, even you might fall for a scam, no matter how careful you are. But to reduce the chances of being taken in by a Wall Street scam, here is a rundown of the five biggest Wall Street scams, and what… Read More