• 16 Jan
    Gruesome Industries For Trading, Not Investing

    Gruesome Industries For Trading, Not Investing

    • Even if the industry has wonderful growth numbers, profitability might remain out of reach.
    • We’ll define and describe the industries long term investors should avoid.

    Introduction

    Most of you are familiar with Warren Buffet’s comment on the airline industry in his 2007 letter to shareholders:

    “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”

    Now, most connect the above statement only to the airline industry. However, in a deflationary environment where our youngsters expect lots of things for free—think WhatsApp—and extremely low interest rates, there will be more industries where shareholder wealth creation will be difficult to achieve.

    In today’s article, we’ll define and analyze some of these industries. More →

  • 15 Jan
    Sunday Edition: A Deep Dive On High Dividend-Paying Stocks

    Sunday Edition: A Deep Dive On High Dividend-Paying Stocks

    As you know, dividends are one of the primary points of focus of the Rebel Income and Retirement Revival investing systems. I’ve written in the past about why I think dividends should be an intrinsic part of a successful income generation system, and why dividend-paying stocks generally have a stronger fundamental profile than stocks that don’t pay a dividend. I’m calling today’s article a “deep dive” because I’ve noticed a lot of buzz in the media lately about high-dividend stocks. There’s a real temptation to focus on stocks paying the highest dividends possible, but the truth is that sometimes that high dividend is really a warning sign of risks that you need to be aware of. More →

  • 13 Jan
    Are You Part Of The Herd?

    Are You Part Of The Herd?

    • The current market has all the symptoms of herd behavior: safety in numbers, lack of proper information, and absence of competitive edge.
    • Market timing and contrarian investment strategies are tempting because of the high rewards, but fundamental value investing is what wins in the long term.
    • We’ll discuss markets that look safer and are much cheaper than the U.S.

    Introduction

    Yesterday we discussed how the situation in the U.S. economy isn’t sustainable in the long term. However, as the economy and the dollar are strong now, U.S. equities have enjoyed another positive period of inflows.

    In the first week of 2017, ETFs had $13.1 billion of inflows in total and the majority of that money ($8.7 billion) went straight into U.S. equities while $2.8 billion went into U.S. fixed income, and only $1.6 billion to international equity ETFs.

    The $8.7 billion going to U.S. equities is a clear indication of herd behavior. More →

  • 12 Jan
    The Edge Of The Cliff No One Wants To See: A Look At The Economic Cycle & Debt

    The Edge Of The Cliff No One Wants To See: A Look At The Economic Cycle & Debt

    • The economic recovery hasn’t lowered debt levels while interest rates are starting to increase.
    • Expect lower consumer, corporate, and government spending.
    • When you invest, please be aware of what is described below.

    Introduction

    Nature works in cycles, there is winter, summer, drought, rain, monsoons, a year with mosquitos, one without, El Niño, La Niña, a good crop, bad crop, etc. As we are part of nature, cyclicality is inherent to our behavior and our behavior is reflected in the economy as we are the economy.

    It’s important to continually analyze and mark where we are in the economic cycle in order to have a better perspective on how to position ourselves as investors. Most analysts and financial professionals look in the rear-view mirror to predict the future and then focus on only one year. This is because it doesn’t pay to look beyond a year as it would force them to tell the truth and consequently lower their selling commissions because not many would invest if they knew that there was a risk of losing 50% of their investment in the next few years. More →

  • 11 Jan
    How To Use ETFs In 2017

    How To Use ETFs In 2017

    • ETFs were the favorite investment vehicle in 2016. Beware of herd behavior.
    • However, ETFs offer plenty of possibilities for the sophisticated investor.
    • Trading and hedging are interesting options for 2017, and ETFs can help a lot.

    Introduction

    The swing from active to passive investing continues.

    In 2016, positive inflows into ETFs (exchange traded funds) were close to $400 billion, and about $200 million flew into passive mutual funds while active mutual funds saw outflows of $250 billion and hedge funds of another $100 billion.

    I’m usually against basket type investments as I prefer to hold the good and leave the bad to others, avoiding herd investments in general. By holding mutual funds or ETFs, you own a bit of everything, good and bad stocks, and follow the crowds. More →

    By Sven Carlin ETFs Investiv Daily
  • 10 Jan
    Don’t Be Fooled By Projections

    Don’t Be Fooled By Projections

    • Forecasts are extremely positive, but know that a bear market or a recession are never in the picture.
    • Of all the S&P 500 ratings, 49% are Buy ratings, 45% are Hold ratings, and 6% are Sell ratings.
    • Be sure to understand the risks of what you’re doing and know history. It may not repeat itself but it rhymes.

    Introduction

    Market bulls base their positivity on strong earnings and economic growth in 2017. However, analysts are usually very optimistic about future developments. But as the forecasted events come closer, most of them cut their estimations.

    Similarly to what analysts do, policy makers are also usually very positive about future economic developments. We could say that positivity is in their job descriptions. More →

  • 09 Jan
    Sven Thinks You Can Be A Millionaire & Tells You How To Get There

    Sven Thinks You Can Be A Millionaire & Tells You How To Get There

    • Investing for the long term isn’t hard and if you avoid doing stupid things, you should expect to be a millionaire when you retire or likely even sooner.
    • Maximize your IRA as it isn’t taxed.
    • Beating the market by a few percentage points leads to staggering differences in 30 years.

    Introduction

    People usually wonder how much money they should put aside and invest in stocks. Should it be 5%, 10% or 15% of your income? Should you put any lump sums into the stock market or not?

    As most of us don’t have clear plans and goals, what happens is that investors invest more when they should invest less and nothing at all when they should go all-in.

    Today’s article will describe the expected end result from investing in stocks, how much your investments will return on average, and how to create a stable strategy in order to not make costly mistakes. More →

  • 08 Jan
    Sunday Edition: Analysis Paralysis & Functional Investing

    Sunday Edition: Analysis Paralysis & Functional Investing

    Have you ever gotten caught up measuring and evaluating multiple sides to an argument or question and found yourself more confused than when you started? It can happen in just about any setting and under just about any context, and I believe that none of us are immune to it, to one extent or another. I guess that in some situations that might be a good thing, because sometimes the best action to take could be no action, but when it comes to investing, I find it to be a real hindrance.

    I learned to think of this phenomenon as analysis paralysis, because when it happens to me I get so caught up in weighing pros and cons, or looking for that one little piece of information that will make my decision obvious that I never actually make a decision; I feel like I can’t do anything until I have put all of the pieces of a puzzle into their proper place. More →

  • 06 Jan
    This Is Why You’ll Want To Take A Closer Look At Investing In China

    This Is Why You’ll Want To Take A Closer Look At Investing In China

    • The large GDP-credit gap in China could be a win-win; panics should be seen as an opportunity to buy on the cheap.
    • Forecasts for the yuan are negative indicating further depreciation. Don’t fight the positive dollar trend for now.
    • Some sectors are going to get crushed by China, thus it is a threat.

    Introduction

    In the last two years, China has shaken the markets twice: once when the Chinese market correction began in August 2015, and when it seemed that we were in for a Chinese/global recession in January 2016. More →

  • 05 Jan
    If You Don’t Own Gold, You Know Neither History Nor Economics

    If You Don’t Own Gold, You Know Neither History Nor Economics

    • The bull case for gold is getting stronger for monetary, fundamental, and technical reasons.
    • Gold miners offer a positive asymmetric risk reward opportunity.
    • However, in the short term, anything is possible.

    Introduction

    I’ve borrowed the title of today’s article from Ray Dalio, the manager of the $150 billion Bridgewater hedge fund.

    Historically I have been against owning gold as it is not a yielding asset. However, after seeing how the global monetary base expands and will probably expand further when the next recession comes along, it’s a good time to contemplate an investment in gold as a hedge against human stupidity and greed.

    Today, I’ll elaborate on the bull case for gold, the risks, investment options, and why I think some of those options have extremely positive asymmetric risks. More →

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