Stocks

  • 08 Aug
    Signs of Fragility in the Economy Point to an Impending Bear Market. What To Do Now To Protect Yourself.

    Signs of Fragility in the Economy Point to an Impending Bear Market. What To Do Now To Protect Yourself.

    • The last jobs report was good news but it also indicates higher costs and full employment.
    • An “easy to hire, easy to fire” mentality is in the air.
    • Healthcare, cash or short term trades should be the best options in this situation.

    Introduction

    Last week the Nasdaq and S&P 500 reached yet another record high. Aggressive central bank stimulation pushes investors to disregard risks and look for any kind of yield or growth. Not looking at risk is the worst thing an investor can do, but they also shouldn’t fight the trend. More →

  • 02 Aug
    Euphoria & Denial Point to the Last Days of the Bull Market

    Euphoria & Denial Point to the Last Days of the Bull Market

    • Risks are cumulating and getting bigger.
    • U.S. GDP growth is slower than expected, earnings and oil prices continue to decline.
    • Japan is unable to grow while BREXIT risks are still unfolding.

    Introduction

    It is difficult to find good news lately. The last really good news was the June jobs report when 287,000 jobs were added. Since then, most of the news seems dismal, however, it has yet to have a negative impact on financial markets. It’s as though investors are just hoping for something good to happen in the future. As hopes are an immaterial human feeling, they should not be the base for investment decisions. More →

  • 29 Jul
    Corporate Earnings of the S&P 500’s Top 10: Why It Is Important for You

    Corporate Earnings of the S&P 500’s Top 10: Why It Is Important for You

    • Corporate earnings and fundamentals are variable, pick the stocks that best suit you.
    • There are low PE ratio stocks, high growth stocks, and high dividend yielders – anything you might want.
    • But be aware: some companies engage in buybacks that are detrimental to shareholders’ value.

    Introduction

    When you add up the top ten companies by weight, they account for 17.7% of the total weight of the S&P 500. For investors who are heavily invested in the S&P 500, following the earnings of its top ten companies is essential in order to understand the risks and rewards of being invested in the index. In this article we are going to assess the current market situation by looking at what has been going on with the 10 biggest companies in the S&P 500 index. More →

  • 26 Jul
    The Economic News is Very Good, But Keep An Eye On the FED and GDP This Week

    The Economic News is Very Good, But Keep An Eye On the FED and GDP This Week

    • Housing is showing inflationary signs but still offers an opportunity to profit from the rising trend as a downturn is unlikely and not expected in the short term.
    • Amidst all the positive news, manufacturing turned negative. Yet despite this, stock valuations keep going up, increasing the risk.
    • In the week ahead: the FED’s decision and GDP data. It looks like stable weather in the near future.

    Introduction

    The last sequence of economic data was very positive. In this article we are going to discuss the important data coming out this week and analyze the information released last week. Then we’ll combine it with the current situation on the market and, as always, analyze the risks and rewards. More →

  • 25 Jul
    Beware of “Thinkless” Investing

    Beware of “Thinkless” Investing

    • Passively managed funds do offer the lowest fees but invest in stocks without “thinking”.
    • High positive net inflows into passively managed funds push large caps higher regardless of fundamentals.
    • If non “thinking” investors panic when things turn, large caps will be the worst performers.

    Introduction

    Today we are going to discuss two related topics: fees and the general market consequences of passively managed investing funds.

    Fees are charged by funds for their services, be it active or passive management. Passively managed funds, which have the lowest fees, merely track an index. Over the last several years a trend has developed toward lower fees and passively managed funds which may also be creating a growing risk that equities are held by “weak” hands.  If panic comes, and investors pull their money out, passive fund managers will be forced to sell, creating further market havoc. More →

  • 01 Jul
    Should You Switch to a More Active Investing Strategy?

    Should You Switch to a More Active Investing Strategy?

    • Passive investing has been excellent in the past decade but has gone nowhere in the last two years.
    • Higher valuations are increasing volatility and risk which gives opportunities for more active strategies.
    • Due to the high valuations in 1968, only an active strategy would have produced positive returns in the period up to 1982.

    Introduction

    The S&P 500 has gone nowhere since December 2014. Several reasons have influenced such a performance, but the most impactful factors seem to be market fundamentals deteriorating while central banks keep limiting the downside by increasing available liquidity. The FED was supposed to begin raising interest rates, but the 0.25% hike was insignificant, and now there is even speculation that the FED could lower interest rates again. More →

  • 29 Jun
    BREXIT Aftermath: Where to Look for Returns & What to Avoid Now

    BREXIT Aftermath: Where to Look for Returns & What to Avoid Now

    • U.S. and Europe are overvalued, especially seeing the current political situation and economic fragility.
    • What’s about to hit Europe and the U.S. already hit emerging markets in 2015. There are opportunities in emerging markets now, but where?
    • Bonds seem the riskiest asset of all with no yield and huge potential downside.

    Introduction

    After last week’s BREXIT vote the markets have been in a free fall with a slight recovery yesterday. But savvy investors have been expecting this and it has been a recurring theme at Investiv Daily that stocks are overvalued. In such an overvalued environment it is normal that inflated asset prices take a beating at any sign of future uncertainty. More →

  • 24 Jun
    How to Prepare Your Portfolio For The Next Recession or Stock Market Crash

    How to Prepare Your Portfolio For The Next Recession or Stock Market Crash

    • The risks of a slowdown are higher than the upside.
    • Fundamental trends are negative in advanced economies while emerging markets show higher growth rates and are cheaper.
    • It is important to create a diversified portfolio with uncorrelated assets.

    Introduction

    In an environment where it seems maximum potential for the U.S. economy has been reached, the St. Louis FED chief, James Bullard, has said in his most recent report that he favors only one interest rate increase through 2018, which would at best keep things stable. His view is further supported by the fact that the unemployment rate is sitting at below 5%, and the Personal Consumption Expenditures PCE inflation—measured by the Dallas FED—is at 1.84%, both of which signal that the economy has reached its maximum potential. More →

  • 20 Jun
    Dividend Aristocrats: Should You Buy?

    Dividend Aristocrats: Should You Buy?

    • Stock picking amid dividend aristocrats should give even better results.
    • Dividend aristocrats come from recession-proof industry sectors.
    • PE ratios vary from 11 to 155 and dividend yields from 0.4% to 6.5%.

    Introduction

    A company receives the title of ‘dividend aristocrat’ when it has continuously increased its dividend for the last 25 or more years. This means that the company manages to go through recessions and market shocks with a growing, healthy cash flow that enables constant dividend increases. More →

  • 15 Jun
    If Stocks Are Risky, What About Bonds?

    If Stocks Are Risky, What About Bonds?

    • Yields should be the main factor when choosing whether to invest in bonds or stocks.
    • As yields cannot go much lower, bonds become risky too.
    • Historically any significant increase in bond yields brings to negative returns.

    Introduction

    It is almost common knowledge that in the long term stocks outperform bonds as bonds are less risky and therefore have lower yields. But if we look at the question from the title of this article from a long term perspective where stocks always outperform, then there is no risk in investing in stocks as eventually you will be rewarded with higher returns. And this is exactly the current market’s perception on the stocks vs. bonds issue. More →

    By Sven Carlin Bonds Investiv Daily Stocks
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