When it comes to investing in stock market or mutual fund, many of us hesitate to invest in stock markets. First thing that comes into our mind is that what will happen to our invested capital if market again crashes like it had crashed in 2008. Would we lose all invested capital or would our portfolio perform even in falling markets? These are normal questions which haunt us now before investing. People prefer to invest their money in government securities, FDs or any instrument returning a fixed yield rather than investing in stock markets or mutual funds.
Before 2008 market crash many of the investors were blindly investing in equity markets. More than 90% of their portfolio was into equity stocks or equity MFs. A lot of them have made good money in the stock market. However, after market crash millions of investors had to suffer great losses, lose back their profits, or have un-expected returns in their portfolios all because they had no plan, no coherent strategy for managing their assets, for obtaining a reasonable and consistent return, and managing or minimizing their risk; their greed made them blindly chase the hottest cake in town. However many of them have changed their view while investing. So the most buzzing question everyone is asking as to whether mutual funds are safe for investment? Let's have a look at some investment strategies which may help your portfolio sustain the next big market crash like the one we had in 2008.
Do not put your all eggs in one basket
In today's volatile markets, it makes sense to spread your investment across asset classes. Diversifying your investments can prove to be a great boon for you when one of the asset class enters its downward journey. If you diversify your portfolio, your overall portfolio performance should deviate less because losses from some investments are offset by gains in others. Therefore, you would face lesser risk than a person who puts all their money in any one type of asset class such as stocks, bonds, government securities and FDs. Diversification also makes sense because no single asset class performs best in all economic environments.
Invest in GOLD
Gold is an alternate instrument to invest. For several reasons gold has proved as good investment tool. The most important amongst them being that the value of gold as a commodity is an excellent store of value. If your grandfather had a kilo of gold dug down under the ground, and you re-discover it after decades, the same gold would help buy the same amount of goods for you that your grandfather would have been able to buy at his time. Gold value depends a lot on global demand and supply. The gap between which has been narrowing down uninterruptedly for very long periods of time. The value increase has always covered the price of inflation, making gold one of the few investments able to protect against currency depreciation. Equally important is the fact that the gold is very liquid, meaning that there will also be buyers for gold, no matter the economic difficulties the rest of the global economy goes through. You will be able to exchange gold for any currency in any part of this world.
Follow Asset Allocation
"Asset allocation" is dividing your portfolio among stocks, bonds, real estate, cash, and other investments according to your risk profile. Historically it's rare that all asset classes lose money at the same time. Spreading your money across investments will help lower the volatility of your portfolio. So it would be recommended to spread your risk our different asset class and most importantly STICK to it. Don't you regret withdrawing from your bond funds and investing into equities in 2007 when in the very immediate year stocks went crashing and bonds rewarded its loyal followers?
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Tags: stock market, mutual fund, crashed in 2008, GOLD, Asset Allocation
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United Continental Holdings Inc.'s (UAL) Jun 2013 airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – dropped 0.6% year over year to 19.12 billion. Consolidated capacity (or available seat miles/ASMs) for the month was 21.79 billion, down 2.0% from Jun 2012.
The load factor (percentage of seats filled by passengers) improved to 87.7% from 86.5% in the same month, last year. Passenger revenue per available seat mile (PRASM) is estimated to have increased 3.5% to 4.5% year over year. The company registered a completion factor of 98.8%, with nearly 71.1% of the flights on schedule.
For the first half of 2013, United Continental generated RPMs of 100.12 billion (down 1.4% year over year) and ASMs of 120.62 billion (down 3.5% year over year). Load factor was 83.0%, reflecting growth of 170 basis points.
Weak domestic activity impacted the performance of the company during the month, offsetting the busy overseas traffic. Other risk factors such as fuel price instability, high non-fuel expenses and sluggish economic conditions are also detrimental to United's operations. Despite these headwinds, United is concentrating on improving its business prospects through a number of initiatives. Recently, the company launched a new advertising campaign to endorse the airline's transcontinental Premium Service flights that take off from New York's John F. Kennedy International Airport and fly to Los Angeles and San Francisco. With this promotional activity, the carrier aims to create awareness about its services, hoping to woo additional flyers in the coming days. United also brought in advanced applications and features on Apple Inc.'s (AAPL) iPhone, Google Inc.'s (GOOG) Android-based smartphones and BlackBerry 10 that will help passengers manage their travel plans in case of flight irregularities. United Continental – that has agreed to buy 30 Embraer SA's (ERJ) 175 regional jets! – currently retains a Zacks Rank #3 (Hold).
This technology company is a leading developer of semiconductor processing solutions for video that enable high-definition, or HD, video capture, sharing, and display, explains small cap specialist Jim Oberweis Jr., of The Oberweis Report. Ambarella's (AMBA) processor design capabilities, combined with expertise in video and image processing, algorithms, and software, together provide a technology platform that is easily scalable across multiple applications, and enables rapid, and efficient product development. The company's system-on-a-chip, or SoC, designs, fully integrate HD video processing, image processing, audio processing, and system functions onto a single chip, delivering exceptional video and image quality, differentiated functionality and low power consumption. Top Small Cap Stocks To Watch Right Now: Voyager Oil & Gas Inc.(VOG) Voyager Oil & Gas, Inc. engages in the exploration and production of oil and gas in the United States. It primarily focuses on oil shale resource prospects in Montana, North Dakota, Colorado, and Wyoming. As of May 17, 2011, the company controlled approximately 141,500 net acres in the five primary prospect areas comprising 28,000 net acres targeting the Bakken/Three Forks in North Dakota and Montana; 14,200 net acres targeting the Niobrara formation in Colorado and Wyoming; 800 net acres targeting a Red River prospect in Montana; 33,500 net acres in a joint venture targeting the Heath Shale formation in Musselshell, Petroleum, Garfield, and Fergus counties of Montana; and 65,000 net acres in a joint venture in the Tiger Ridge gas field in Blaine, Hill, and Chouteau counties of Montana. It supplies energy and fuel for industrial, commercial, and individual consumers. The company is based in Billings, Montana. Advisors' Opinion: - [By SmallCap Investor]
Shares of this explorer, which has operations in the Western U.S., crossed back above $3 and have risen 40 percent in the past month, amid increasing investor interest in companies drilling in the Bakken region.
Top Small Cap Stocks To Watch Right Now: Sify Technologies Limited(SIFY) Sify Technologies Limited provides enterprise and consumer Internet services primarily in India. The company offers various corporate network/data services comprising e-commerce and network connectivity solutions, such as end-to-end services network, application, and security services; voice origination and termination services; co-location and managed hosting services; and system integration services for data centre build, hardware distribution, security solutions, and turnkey projects. It also provides application services, including SLEMS and Microsoft Exchange messaging platforms; I-test for online assessment and LiveWire, which enable management of training processes across the organization; document management system for the management of documents electronically; and Forum, a forward supply chain solution. In addition, the company operates e-Ports that offer browsing, chat, email, gaming, utility bill payment, travel ticketing, hotel booking, mobile recharge, Intern et telephony, and online share trading services; and portals, which provide news, views, reviews, interactions, and services in the areas of movies, sports, finance, food, videos, astrology, online games, shopping, and travel, as well as offers content offerings and broadband services. Further, it provides infrastructure management services, such as network management, datacenter and helpdesk outsourcing, desktop and storage outsourcing, IT security outsourcing, LAN and WAN outsourcing, database and telecom outsourcing, and application monitoring and management services to automotive, chemical, media, and financial enterprises; and virtualization design, integration, and deployment services for servers, storage, networks, and end user clients. Sify has approximately 1,278 e-Ports in 200 towns and cities; and serves 1,06,000 broadband subscribers through 1500 cable TV Operators. The company, formerly known as Sify Limited, was founded in 1995 and is based in Chennai, India. Advisors' Opinion: - [By Wyatt Research Staff]
Shares of SIFY skyrocketed last week after the company announced a new partnership with Saudi telecom. SIFY will provide ICT services to the Middle East's largest telecom carrier. Shares of the Indian-based internet and network services have doubled over the past four months.
Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company?s Analog segment offers high-performance analog products comprising standard analog semiconductors, such as amplifiers, data converters, and interface semiconductors; high-volume analog and logic products; and power management semiconductors and line-powered systems. Its Embedded Processing segment includes DSPs that perform mathematical computations to process and enhance digital data; and microcontrollers, which are designed to control a set of specific tasks for electronic equipment. The company?s Wireless segment designs, manufactures, and sells application processors and connectivity products. Its Other segment offers smaller semiconductor products, which include DLP products that are primarily used in projectors to create high-definition images; and application-specific integrated circuits. This segment also provides handhe ld graphing and scientific calculators, as well as licenses technologies to other electronic companies. The company serves the communications, computing, industrial, consumer electronics, automotive, and education sectors. Texas Instruments Incorporated sells its products through a direct sales force, distributors, and third-party sales representatives. It has collaboration agreements with PLX Technology Inc.; Neonode, Inc.; and Ubiquisys Ltd. The company was founded in 1938 and is headquartered in Dallas, Texas. Advisors' Opinion: Top Small Cap Stocks To Watch Right Now: Rackspace Hosting Inc(RAX) Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company?s service suite includes dedicated hosting comprising customer management portal and other management tools that manage data center, network, hardware devices, and operating system software; and cloud computing that enables customers to provide and manage a pool of computing resources, as well as delivery of computing resources to business when they need them. It offers cloud servers, cloud files, and cloud sites, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides a combination of dedicated hosting and cloud computing services. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, an d online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas. Advisors' Opinion:
We retain our Neutral recommendation on Natural Resource Partners L.P. (NRP). The mineral reserve properties owner currently holds a Zacks Rank #4 (Sell).
Why the Reiteration?
The partnership's earnings in the first quarter of 2013 surpassed the Zacks Consensus Estimate but fell short of the year-ago figure. This was primarily due to lower coal royalty revenues.
The reiteration takes into consideration stringent environmental legislations adopted by the U.S. which will continue to impact pure coal plays like Natural Resource. In this context, renewable energy sources are steadily gaining ground which could threaten the partnership's prospects.
In addition, an increase in transportation cost would affect Natural Resource's competitive edge and create margin pressure.
However, reviving natural gas prices would provide an avenue for steam coal markets to regain momentum. This will certainly boost the confidence of lessees to reopen their mines, thereby benefiting Natural Resource.
Furthermore, the partnership's unconventional investments like interest acquisition in OCI Wyoming looks well-timed given the projected 3.8% climb in soda ash demand in 2013 led by Asia, the Middle East and Africa. Natural Resource will also profit from the improving global steel market fundamentals that will propel its metallurgical coal operations.
Nonetheless, the risk of losing lessees by Natural Resource in a dull U.S. economy cannot be denied. Natural Resource's business will also be affected by the Obama Climate Plan which called for a gradual reduction in coal-based operations.
Another coal play equally affected by the plan is Arch Coal Inc. (ACI).
Other Stocks to Consider
However, other coal industry players looking good at the moment are Zacks Ranked #1 (Strong Buy) Alliance Resource Partners LP (ARLP) and Zacks Ranked #2 (Buy) Hallador Energy Company (HNRG).
With shares of Zynga (NASDAQ:ZNGA) trading around $3, is ZNGA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework: T = Trends for a Stock’s Movement Zynga is a provider of social game services with 240 million average monthly active users over 175 countries. The company develops, markets, and operates online social games as live services played over the Internet and on social networking sites and mobile platforms. Zynga's games are accessible on Facebook, as well as other social networks and mobile platforms, to players globally — wherever and whenever they want. It operates its games as live services, and they are all free to play. However, it does generate revenue through the in-game sale of virtual goods and advertising. As social gaming continues to pick up steam among consumers worldwide, a pioneer in the industry like Zynga stands to see rising profits for many years. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! T = Technicals on the Stock Chart are Strong Zynga has seen its stock price decline since its initial public offering a couple of years ago. The stock is now seeing a strong bounce from lows established last year. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Zynga is trading around its rising key averages which signal neutral to bullish price action in the near-term. 
(Source: Thinkorswim) Taking a look at the implied volatility (red) and implied volatility skew levels of Zynga options may help determine if investors are bullish, neutral, or bearish. | Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | | Zynga Options | 58.78% | 23% | 21% | What does this mean? This means that investors or traders are buying a minimal amount of call and put options contracts, as compared to the last 30 and 90 trading days. | Put IV Skew | Call IV Skew | | June Options | Average | Average | | July Options | Average | Average | As of today, there is an average demand from call and put buyers or sellers, neutral to bullish over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months. On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion. E = Earnings Are Mixed Quarter-Over-Quarter Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Zynga’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Zynga look like and more importantly, how did the markets like these numbers? | 2013 Q1 | 2012 Q4 | 2012 Q3 | 2012 Q2 | | Earnings Growth (Y-O-Y) | 100% | 94.40% | -700% | -400% | | Revenue Growth (Y-O-Y) | -17.88% | -0.02% | 3.20% | 19.11% | | Earnings Reaction | -6.56% | 9.12% | 12.2% | -37.4% | Zynga has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets have been a bit confused about Zynga’s recent earnings announcements. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! P = Excellent Relative Performance Versus Peers and Sector How has Zynga stock done relative to its peers, Electronic Arts (NASDAQ:EA), Activision Blizzard (NASDAQ:ATVI), Facebook (NASDAQ:FB), and sector? | Zynga | Electronic Arts | Activision Blizzard | Facebook | Sector | | Year-to-Date Return | 46.40% | 52.07% | 46.28% | -3.57% | 25.89% | Zynga has been a relative performance leader, year-to-date. Conclusion Zynga provides online entertainment through its gaming services and platforms to a growing audience around the world. The stock has witnessed a good amount of selling pressure over the last few years but is now popping higher. Earnings and revenue figures have been mixed which has only instilled unease in investors. Relative to its peers and sector, Zynga has been a year-to-date performance leader. Look for Zynga to OUTPERFORM.
Okay, let's break it down. It's August. It's the height of the vacation season. The markets are going sideways. Volume is very light (SPY volume has been below average for 27 straight trading days). Earnings season has just about ended. There hasn't been an important piece of economic data in a week (although that will change soon). The computers have been in charge on an intraday basis. Sentiment is complacent at best and overly optimistic at worst. Valuations are debatable. And in short, it just "feels" like something bad is about to happen. Whenever this type of environment occurs, emotions should be put aside and market indicators should be examined. There is just something cathartic about looking at some cold, hard numbers when things are "iffy." Looking at indicators over different time frames is an important way to diversify analysis. As such, both daily and weekly market environment models are utilized. Today, the intermediate term week-long models will be examined. The "State" of the Market Environment Although there are some overlapping areas, the Weekly Environment Model is comprised of 10 individual indicators or models. These 10 can then be broken down into the following categories: tape, trend, sentiment, economic, monetary and the overall risk environment. In terms of weighting, the majority of the model weight is given to tape and trend indicators (60 percent) while the "external" factors account for 40 percent of the model. This fits with the view that the price/tape action of the market should be the final arbiter of the action. In addition, tape and trend indicators serve as excellent stop-loss signals for those times when the market's moves diverge from the "logic" of things like economics, news or earnings. To give an incentive to continue reading, let's first review the performance of this particular model. Due to changes in data availability, the overall model was reworked at the end of 2011. However, the live performance hasn! 't been too bad. In 2012, using the leveraged ProShares Ultra S&P 500 (SSO) when the model is positive, the ProShares Short S&P 500 (SH) on negative signals, and a cash equivalent on neutral signals, the test of the model would have produced a return of 46.2 percent (compared to the S&P 500 cash index return of 16.3 percent). And then, so far in 2013 (through Aug. 9), the model's return would be 25.4 percent (versus S&P 500: 19.7 percent). As such, the cumulative total return would have been 83.3 percent for the model since 2012 as compared to 34.5 percent for the S&P 500. So, while its history isn't long, this model is watched closely each week. Since the explanation of the models and indicators that make up the weekly market environment model as well as the analysis of the current readings covers a fair amount of ground, we will break the review up this week. This morning we will take a look at the state of tape and trend indicators. The Trend Indicators Let's start with the easy stuff — t he trend indicators. The weekly environment model contains three indicators that are dedicated to the trend of the overall market. For starters, the short-term trend of the S&P 500 is rated. For the purposes of this model, short term is defined as between five and 15 trading days. Next is the intermediate-term trend of the market. Here the focus is primarily on the market relative to its 10-week weighted moving average (which we move forward two periods). And finally, the cycle composite is examined, which is a combination of the one-year seasonal, four-year presidential and 10-year decennial cycles. Currently, the short-term trend rating is neutral, for fairly obvious reasons. However, the rating of the intermediate-term trend is clearly positive. A quick peek at the S&P 500 weekly chart versus its 10-week moving average should confirm this rating. And finally, the cycle composite suggests that stocks could struggle a bit next week. So, the rating for the cycle co! mposite i! s moderately negative. When assigning a score of +1 for positive readings, 0 for neutral readings and -1 for negative readings, the overall rating for our trend components is dead neutral for the upcoming week. The Tape Indicators The weekly environment model incorporates three "tape" indicators. Momentum-oriented indicators are included in this category. These are the indicators that reveal the internal health of the market and help to determine the "oomph" behind a move in either direction. The tape indicators include a breadth-confirmation system, a review of the supply/demand volume and a model that rates the technical health of more than 100 S&P industry groups. Currently the tape indicators remain fairly strong. The breadth-confirmation system is positive as both the trend of the market and of the stock-only advance/decline line are above their appropriate smoothings. The supply/demand volume relationship indicator is also quite positive currently as demand volume remains well above supply at this stage. And finally, the model that rates the technical health of more than 100 industry groups is moderately positive at this time. So, while these indicators are all intermediate-term or longer in nature, the group as a whole is positive. Spoiler Alert: While there are still a handful of model components left to review, the overall rating for the weekly environment model is currently moderately positive. This suggests to give the bulls the benefit of the doubt should things get sloppy in the near term. To clarify, this model does not attempt to "predict" what is going to happen in the market. No, the goal is to first identify and then stay on the right side of what "is" happening in the current environment. Current Market Drivers Success comes from understanding the driving forces behind the market action on a daily basis. The thinking is that if one can both identify and understand why stocks are doing what they are doing on a short-term ba! sis, it i! s unlikely one will be surprised/blind-sided by a big move. listed below are some of the driving forces of the current market (listed in order of importance). 1. The State of Fed/Global Central Bank Policies 2. The Outlook for the U.S./Global Economy 3. The State of the Budget (starting to come up on traders' radar screens) The State of the Trend It is important to analyze the market using multiple time-frames. Short-term is three days to three weeks, intermediate-term is three weeks to three months and long-term is three months or more. Below are current ratings of the three primary trends: Short-Term Trend: Neutral (Chart below is S&P 500 daily over past one month)  [ Enlarge Image ] Intermediate-Term Trend: Positive (Chart below is S&P 500 daily over past six months)  [ Enlarge Image ] Long-Term Trend: Positive (Chart below is S&P 500 daily over past 12 months)  [ Enlarge Image ] Key Technical Areas: Traders as well as computerized algorithms are generally keenly aware of the important technical levels on the charts from a short-term basis. Below are the important levels to watch today: Near-Term Support Zone(s) for S&P 500: 1680Near-Term Resistance Zone(s): 1710The State of the Tape Momentum indicators are designed to determine the technical health of a trend, i.e. if there is any "oomph" behind the move. Below are a handful of indicators relating to the market's "mo"... Trend and Breadth Confirmation Indicator: Moderately PositivePrice Thrust Indicator: PositiveVolume Thrust Indicator: NeutralBreadth Thrust Indicator: NeutralBull/Bear Volume Relationship: PositiveTechnical Health of 100 Industry Groups: Moderately PositiveThe Early Warning Indicators Markets travel in cycles! . Thus on! e must constantly be on the lookout for changes in the direction of the trend. Looking at market sentiment and the overbought/sold conditions can provide "early warning signs" that a trend change may be near. Overbought/Oversold Condition: The S&P 500 is neutral from a short-term perspective and is low neutral from an intermediate-term point of view.Market Sentiment: The primary sentiment model is low neutral . The State of the Market Environment One of the keys to long-term success in the stock market is to stay in tune with the market's "big picture" environment in terms of risk versus reward because different market environments require different investing strategies. To help identify the current environment, we look to the longer-term State of the Markets Model. This model is designed to determine when risk factors are high, low, or uncertain. In short, this longer-term oriented, weekly model reveals whether the odds favor the bulls, bears, or neither team. Weekly State of the Market Model Reading: Positive. This suggests it continues to favor the bulls. Thought for the Day "If your actions inspire others to dream more, learn more, do more and become more, you are a leader." - John Quincy Adams Mr. David Moenning is a full-time professional money manager and is the president and chief investment strategist at Heritage Capital Management. He focuses on stock market risk management, stock analysis, stock trading, market news and research, and actionable subscription portfolio services.
The tab for speculating in the stock market is about 4% a year, according to the calculation of one influential wealth manager. That’s a harsh penalty to pay when the S&P 500’s average annual result over the past 15 years is barely above that amount, at 4.28%.  Eric Nelson of Servo Wealth Management goes through the grim numbers in his July newsletter to clients.
The Oklahoma City-based registered investment advisor and Dimensional Fund Advisors loyalist starts his analysis at the professional money manager level, arguing that their performance as measured against indexes shows they lack market-beating skill. Unlike top athletes or surgeons who demonstrate superior abilities, Nelson’s scorecard reveals that just 20% of fund managers beat their index from 2008 to 2012 and that the number who did so in most categories closely matched the number of mutual funds that were outright closed “due to horrendous underperformance.” For example, 24.6% of active large-cap funds beat their index during that period, while 27.7% of active large-cap funds were shut down. The category that exhibited the least correspondence was not to the credit of professional managers: Just 9.6% of active short-term bond funds beat their index—far less than the 21.7% of such funds that closed during that period. Nelson attributes manager selection to a Lake Wobegon mentality that assumes their manager is better than average. Yet he argues that people select their better-than-average managers based on past performance that doesn't persist. Nelson cites data from Standard & Poor's showing the performance of the top managers from 2003 to 2007 in the subsequent five-year period from 2008 to 2012. Just 24.1% of top quartile managers remained in the top quartile, whereas 19.3% fell to the second quartile, 20.3% to the third quartile and 23.1 dropped to the last quartile; the missing 13.3% lost their jobs as their funds were shut down. The wealth manager concludes: “So even when narrowing the search for a professional active manager to only those who have previously produced the best results, we still find the chance of future index-beating returns is no better than choosing at random (by chance, we’d expect to have 1/4 odds of landing in each of the four quartiles, and a bit less when we consider the odds of disappearing completely).” Nelson notes there are actually greater odds (nearly 37%) of a top fund falling to the bottom quartile or disappearing than remaining in the top quartile (24%). The professional advisor emphasizes that this poor performance emanates from people with chartered financial analyst (CFA) designation and Ivy League MBAs. “If they can’t get it right," he asks, "what is the chance that a do-it-yourself investor running a Charles Schwab or Morningstar stock screener for a few hours in the evening or on the weekends will perform better?” Drilling down further, Nelson next takes a page out of John Bogle’s book, literally, and considers both the underperformance of active managers and bad investor behavior. Bogle’s The Clash of the Cultures shows that large-cap funds returned 4.1% to investors from 1997 to 2011, compared with 5.4% for their S&P 500 benchmark. While the numbers are both small, Nelson points out that that means 37% less wealth over 15 years for active fund investors, and 72% less wealth over the same time period compared to the wealth managers’ clients invested in his favorite DFA US Large Value Fund (DFLVX). “But even this dismal result is too generous,” Nelson says, since naughty investors typically dump poor-performing funds for those with recent good performance, which subsequently perform poorly, which “amplifies the return deficit.” Citing Bogle again, Nelson shows that investor returns trail fund returns by nearly 2% on average. “So between poor professional management and bad investor behavior, the total cost speculators pay is almost 4% per year!” Nelson says in summary, calling on investors to save their wealth through the discipline of a fee-only investment advisor. --- Check out Your Move, Bogleheads: Advisor Finds DFA’s Returns Trump Vanguard’s.
On Jul 8, we retained Hanger Inc. (HGR) at Neutral, following its solid first-quarter 2013 results. In spite of the upbeat performance, we remain on the sidelines given the uncertain healthcare environment.
Why the Retention?
Hanger's adjusted earnings of 28 cents per share for the first quarter surpassed the Zacks Consensus Estimate by 12%. Profit of this orthotic and prosthetic (O&P) company grew 10.5% to $9.5 million (or 27 cents a share), primarily led by strong sales and accretive acquisitions.
Revenues increased 7.1% year over year to $233.5 million in the quarter, marginally beating the Zacks Consensus Estimate of $233 million. It led to record sales of above $1 billion for the company, trailing 12 months. While, the core Patient Care segment is growing on the back of increased same-center sales, the Distribution business is facing headwinds in the form of unfavorable weather and tough year-over-year comparisons.
The company's earnings have also managed to beat the Zacks Consensus Estimates in the last 4 quarters with an average surprise of 5.87%. Following the earnings release, the Zacks Consensus Estimate for 2013 has moved up by 1.5% to $2.09 per share. For 2014 too the Zacks Consensus Estimate increased significantly (up 3.9% to $2.40 per share). Hanger enjoys a sovereign position in the orthotic and prosthetic (O&P) market and continues to gain market share. The company is focusing on expanding its geographical footprint and revenues through complementary acquisitions. In addition, to derive better results from its market strategy from 2013, the company realigned its reporting segments. However, Hanger remains affected by a host of macro issues including sequestration, and measures (including Medicare and Medicaid reimbursement cuts) adopted by the state governments to cover budget deficits. Moreover, the i! mpact of the medical devices tax is pressurizing the company's margins. These factors are apprehended to weigh on Hanger's results going forward. Other Stocks to Consider Other large-cap medical products companies such as Resmed (RMD), Essilor International SA (ESLOY) and Edwards Lifesciences Corp. (EW) are expected to do well in the medical industry. All these stocks carry a Zacks Rank #2 (Buy).
It's pretty rare to see an "Underperform" rating on a med-tech stock these days, but Becton Dickinson (NYSE:BDX) carries more than Johnson & Johnson (NYSE:JNJ), Abbott (NYSE:ABT), and Cepheid (Nasdaq:CPHD) combined. I won't pretend to have read all the research reports out there, but it seems that most of those analysts who are cautious/negative on BD are so because of the stock's very robust valuation and concerns about both near-term and long-term growth in the diagnostics business. I too see these shares as overpriced relative to the likely growth trajectory, and wouldn't be a buyer at these levels.
A Sound Fiscal Q3 Doesn't Help The Bears
Against that bearish backdrop, BD continues to perform pretty well. Overall reported revenue growth of under 4% met expectations, with underlying organic constant currency growth of about 5%. Growth in the medical space (up 8%) was well ahead of the underlying market, while diagnostics (up 4%) was more or less in line, and biosciences (down 3%) was weak.
SEE: A Checklist For Successful Medical Technology Investment
Although BD's reported profits and margins weren't very good in absolute terms, they did well where it counts (relative to sell-side/Wall Street expectations). Gross margin fell about a half-point from last year, as forex moves and acquisition expenses offset pricing benefits. Operating income declined 5% and the operating margin fell almost two points, though the company did come in a point better than expected on restrained opex spending.
Strong Medical Leading The Way
Although patient volumes and procedure counts are far from robust, BD's Medical business continues to deliver appealing growth well ahead of the underlying markets. Diabetes in particular is notably strong (up 9%), as although the company benefited from the reversal of some adverse timing issues, demand for smaller needles and pre-filled pens continues to be quite strong in the face of weak diabetes results from companies like Johnson & Johnson.
Menu Matters
BD's diagnostics business performance is more mixed. Relative to Abbott (up more than 7%), Roche (Nasdaq:RHHBY) (up about 5% ex-diabetes), and Danaher (NYSE:DHR) (up "mid single digits"), BD isn't exactly blowing the doors off their hinges. The company is seeing good results in its process of transitioning customers to its new MAX platform, with about 40% of the placements actually displacing rivals. Long-term, the good assay cost and flexibility of the MAX ought to serve the company well, but sales growth will likely be limited until BD can role out a more robust menu of tests (space is limited in labs, and adding a new box doesn't make sense if it can't run enough tests).
Longer-term, though, BD may have more work to do. Although the company has pretty good share in molecular testing, I do have some concerns about whether they will lose share in STD testing to Hologic (Nasdaq:HOLX) and Roche over time, as well as Cepheid (Nasdaq:CPHD) in hospital-acquired infections (HAI). Likewise, I don't see the company as particularly well-placed for the upcoming growth spurt in hepatitis C testing (including both viral load testing and genotyping), and rivals like Abbott, Roche, and Cepheid may have BD on the outside of a market that could deliver double-digit growth for much of the next decade. SEE: Cepheid Posts Prelim 2Q13 Results
BD being BD, I wouldn't expect any dramatic moves. While I think BD could consider acquiring a diagnostics company like Cepheid or GenMark (Nasdaq:GMRK), neither would come cheaply. Still, it would help lift reported growth and sometimes the Street gets what it wants in that regard. The Bottom Line
It's hard for me to see how BD is cheap today. While I believe there is still above-average growth potential in the diabetes business and under-appreciated potential in the company's new injectables business, the shares seem priced for growth that I just don't believe the company can deliver. Seeing as I don't think the stock will pull back to $90 or so any time soon without something going very wrong in the market, I don't see Becton Dickinson shares holding all that much appeal. Disclosure – At the time of writing, the author owned shares of Roche.
In an effort to boost shareholders' wealth, Walgreen Co. (WAG) recently announced a 14.5% hike in its quarterly dividend. The drug retailer will now pay a dividend of 31.5 cents per share, higher than the earlier rate of 27.5 cents per share.
Subsequent to the dividend hike, the annual dividend rose to $1.26 from $1.10 earlier. The increased dividend will be paid on Sep 12, 2013 to stockholders of record on Aug 20.
The news sparked investor optimism as the stock price alleviated 3.01% (or $1.40) on the day of the announcement. The company's dividend yield improved to 2.6% following the dividend hike. The current dividend payout ratio hovers over 37% for Walgreens.
The recent dividend raise is in line with the company's strategy to maintain long-term dividend payout ratio of 30%-35%. The hike reflects a compound annual growth rate (CAGR) of about 23% for dividends over the last 5 years.
It is encouraging to note that the company has been paying dividends for more than 80 years and the recent hike marks the 38th successive year of dividend increase for the company. Notably, Walgreens is positioned on a healthy dividend growth track. Thus, the solid dividend payouts should appear attractive to investors.
Walgreens' cash and cash equivalents were almost $3 billion in the third-quarter fiscal 2013, up 50.1% from the year-ago quarter. Moreover, it generated operating cash flow of $1.4 billion and free cash flow of $1.1 million, reflecting sequential improvement from the second quarter. With a strong cash position, the company always strives to benefit its shareholders through dividend payments and share repurchases. Walgreens' strong balance sheet has enabled it to consistently hike dividends. We note that fiscal year-to date, Walgreens did not repurchase any shares under its current buyback program to repurchase up to $2 billion of its common stock through Dec 31, 2015. Investors may also look forward to rewards in the form of considera! ble share repurchases with optimism. While Walgreens' strategy to reward shareholders boost optimism, the persistent lower-than-expected sales remains a matter of concern. The company also missed the earnings mark when it reported third-quarter results in late June. Currently, the stock carries a Zacks Rank #3 (Hold). While we remain on the sidelines for Walgreens, Herbalife Ltd. (HLF), carrying a Zacks Rank #1 (Strong Buy) warrants a look. Zacks Rank #2 (Buy) stocks such as AmerisourceBergen Corporation (ABC) and CVS Caremark (CVS) are also worth considering.
Here is the edited transcript of the interview on CNBC-TV18. Q: REC has recently announced a very large tax free bond. Would you advise your clients to invest in RECs, particularly in context that equity markets have started seeing a bit of a revival? Also, this time around the investible limit has been hiked to an unprecedented Rs 10 lakh per investor. How much investment is advisable and what kind of yield are you expecting, given these bonds will be listed as well? A: Let me clarify that only the interest earned from these bonds is tax free and there is no tax exemption on the investment amount. I believe these bonds provide a good opportunity for investors to lock-in their money for longer periods. There are two options of 10 year and 15 year bonds and these are safe bonds, these are AAA rated bonds and they should buy REC which is a Government of India owned corporation. Even in terms of liquidity, there is going to be enough liquidity in the 10 and 15 year bonds by way of listing at NSE and BSE. I think these are definitely good options and as far as coupon is concerned, it is 7.22 percent for 10 year option and 7.38 percent for 15 year option. But, for retail investors who have been defined as the ones who will invest upto Rs 10 lakh, will get additional 50 basis points, meaning it is going to be 7.72 percent for 10 year bonds and 7.88 percent for 15 year bonds. The issue size is around Rs 4500 crore and 40 percent of it has been earmarked for retail investors. The minimum investment is Rs 5000 which is five bonds and thereafter, in multiples of Rs 1000. In terms of liquidity, I think there is going to be ample liquidity by way of listing. The major attraction for investors here is the tax free status of the dividend. What typically happens is if we take an example of someone who is in the 30 percent bracket, the pre tax return comes to around 11.25 percent. Now, it is very hard to find an option where one is assured of getting around 11 percent plus pre-tax return over a 10-15 year period. That too in an option where these are issued by government owned organizations where money is safe. In terms of allocation, I would say that investors need to be a little careful. I believe they should only be putting in that amount which is earmarked for their debt portfolio, especially the one which can be kept aside for the long-term. I don't think it will be a great idea to think of taking money out of their equity portfolio or money which is earmarked for equity portfolio for investing in this bond. I strongly believe that over a period of 10-15 years, equity can definitely give better returns. There is something called asset allocation. I think there is a place for every asset class in the portfolio. Out of a debt portfolio, I think specially the money which can be kept aside for a longer period is a pretty good option. 1 2 Watch Video Excerpts from Markets and Macros on CNBC-TV18 Watch the full show » .ftCnbcShare{border-top:#d1d1d1 1px solid; padding:8px;margin-bottom: -27px; margin-top:10px;} Markets And Macros at 11:00 am .gD_15nRedN{font:15px/20px Arial;color:#FF0000 !important;text-decoration:none;font-weight:normal;} Related News REC may touch Rs 250, says Shardul Kulkarni Rural Elect Corp fixes book closure for final dividend & AGM .gD_15nRed{font:15px/20px Arial;color:#FF0000 !important;text-decoration:none;font-weight:bold;} .GoogleNewsTitle{font:14px/16px Trebuchet MS,Arial,Helvetica,sans-serif;color:#005066;text-decoration:none;} .GoogleNewsTitle:hover{text-decoration:underline} .GoogleNewsURL{font:12px Trebuchet MS,Arial,Helvetica,sans-serif;color:#000;text-decoration:none;} .GoogleNewsURL:hover{text-decoration:underline} .GoogleNewsTitleLine{font:20px/22px Trebuchet MS,Arial,Helvetica,sans-serif;color:#F01414;text-decoration:none} .GoogleNewsTitleLine:hover{text-decoration:underline} .GoogleNewsLineURL{font:12px family:Trebuchet MS,Arial,Helvetica,sans-serif;color:#000;text-decoration:none} .GoogleNewsLineURL:hover{text-decoration:underline} Set email alert for Rural Elect Cor Tags: tax , bonds , tax free bonds, Hemant Rustagi , Wiseinvest Advisors No intent to control capital; fund-raising door open: FM No intent to control capital; fund-raising door open: FM .scroll_hv .panel{width:250px !important; padding:10px 10px 25px !important} #scroll13{width:540px;} .hv_bx{margin-left:-10px;} .tab_data1{padding:0px;} | Get Quote Stock Chart Future Price Option Price NAVs News Business Earnings Management Interviews Announcements Stock Views Brokerage Reports Announcements Board Meetings AGM/EGM Bonus Rights Splits Dividends Information Company History Background Board of Directors Capital Structure Listing Info Locations Block Deals Financials Balance Sheet Profit & Loss Quarterly Results Half Yearly Results Nine Monthly Results Yearly Results Cash Flow Ratios Annual Report Directors Report Chairman's Speech Auditors Report Notes to Accounts Finished Goods Raw Materials Peer Comparison Price Price Performance Market Cap Net Sales Net Profit Total Assets | | Most Popular Top News Inflation is back: July WPI is a defeat for RBI, finmin Immigration Bill: 8 Indian IT cos form lobbying consortium Nation will compare speeches from Red Fort, Gujarat: Modi Veerappa Moily hints at 1 time diesel price hike RBI combats rupee slide; cuts USD remittances to $75,000 NSEL announces detailed Settlement Plan Kingfisher's Q1 loss doubles on aircraft re-delivery cost Transfer pricing safe harbour rules by Sept: Govt No takers for Polaris's services biz: Sources Dell's quarterly profit plummets as PC sales shrink Orange County in California drags TCS to court Rakesh Jhunjhunwala buys 6.21 lakh shares of Escorts Magnitude 6.8 earthquake shakes New Zealand Sell emerging markets, but do it wisely: Roubini strategist SingTel raises Bharti Airtel stake for $302.2 mn Delhi power company struggles to pay dues as blackouts loom Tata Motors global wholesales down 14% in July Gold demand hits 4-year low in Q2 despite eager consumers Dell's quarterly profit plummets as PC sales shrink
What stocks did Warren Buffett buy in the second quarter? It's anybody's guess. Think you know? Post three stocks in the comments section below. Last quarter, there were four winners: Chihin, Errold, Luishernandez and Clemo69. They correctly guessed that Buffett bought DaVita (DVA), Wells Fargo (WFC) and IBM (IBM). Congratulations! When the portfolio is revealed, winners will get an investing book of their choice: Joel Greenblatt: The Little Book That Still Beats the Market (Little Books. Big Profits)  [ Enlarge Image ] Joel Greenblatt: You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits  [ Enlarge Image ] Benjamin Graham: The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)  [ Enlarge Image ]Martin Whitman: The Aggressive Conservative Investor Peter Lynch: Beating the Street  [ Enlarge Image ]Peter Lynch: One Up On Wall Street : How To Use What You Already Know To Make Money In The Market  [ Enlarge Image ]Benjamin Graham: Security Analysis: The Classic 1934 Edition  [ Enlarge Image ] David Dreman: Contrarian Investment Strategies - The Next Generation  [ Enlarge Image ]The Snowball: The Snowball: Warren Buffett and the Business of Life  [ Enlarge Image ]Howard Marks: The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing)  [ Enlarge Image ] We host the same contest every quarter. What would Warren Buffett do? Happy guessing! Related links:Warren BuffettDVAWFCIBMJoel GreenblattMartin WhitmanDavid DremanHoward Marks
Lockheed Martin Corp. (LMT) received a contract from the Department of Defense (DoD) worth $138.5 million to provide Communications Technical Support Services ("CTSS") to the U.S. Air Force Central Command. Per this contract, the company will supply important information to forward-deployed forces in Operation Enduring Freedom (Afghanistan) and Operation New Dawn (Iraq). The CTSS program will also deliver critical information to forces deployed in other parts of Southwest Asia. The company will begin providing services from Sep 2013 which will continue through Sep 20, 2014. The contract also has an option to be extended for three months, which if implemented would extend the contract through Dec. 20, 2014. The DoD has recently been doling out contracts to the defense companies. Lockheed Martin among others has been a key beneficiary of these awards. Recently, Mission Systems and Training, a business wing of Lockheed Martin, won a $295 million contract from the DoD for work on the Aegis missile defense. This is a sole-source, cost-plus-incentive-fee/cost-plus-award-fee/cost-plus-technical-schedule incentive fee contract modification, under which Lockheed Martin will provide system engineering and program management services. Prior to that, Data Link Solutions, Alliant Techsystems Inc. (ATK), FLIR Systems Inc. (FLIR) and Lockheed Martin also received a number of DoD contracts. A total of 22 contracts were issued that had a cumulative value of less than $500 million. Going forward, we expect Lockheed Martin to benefit from a strong defense focus on a number of its platform programs, such as the C-130 Hercules & C-5 Galaxy transport aircrafts, F-16 Fighting Falcon multi-role jet, MH-60 Helicopters, the Advanced Extremely High Frequency & the Global Positioning Satellite III system satellites, the Littoral Combat Ship, the Aegis Weapons System for! mobile and sea-based missile defense and the Terminal High Altitude Area Defense system. Despite the lurking fears of sequestration and its adverse impact on U.S. defense budgets, we expect Lockheed Martin to register a stable performance in the long run due to a leveraged presence in the Army, Air Force, Navy and IT programs. The company presently retains a short-term Zacks Rank #3 (Hold). In the near term, we would advise investors to accumulate its short-term Zacks Rank #1 (Strong Buy) peer Erickson Air-Crane Inc. (EAC).
A recent study by a smartphone insurer found that despite all of the upgrades, the durability of the Samsung Galaxy S4 may be an issue. As smartphones get bigger, lighter, and faster, durability remains an important concern. In the video below, Fool.com contributor Doug Ehrman discusses the relative rank of Samsung's newest addition to the Galaxy line and how it stacks up against both its predecessors and�Apple's (NASDAQ: AAPL ) flagship iPhone 5. Even with the appeal that Google (NASDAQ: GOOG ) Android and Microsoft (NASDAQ: MSFT ) have garnered, durability remains an important consideration, particularly as prices continue to rise. There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now. Best Heal Care Stocks To Own Right Now: Peabody Energy Corporation(BTU) Peabody Energy Corporation engages in the mining of coal. It mines, prepares, and sells thermal coal to electric utilities and metallurgical coal to industrial customers. The company owns interests in 30 coal mining operations located in the United States and Australia, as well as owns joint venture interest in a Venezuela mine. It is also involved in marketing, brokering, and trading coal. In addition, the company develops a mine-mouth coal-fueled generating plant; and Btu Conversion projects that are designed to convert coal to natural gas or transportation fuels; and clean coal technologies. As of December 31, 2011, it had 9 billion tons of proven and probable coal reserves. The company was founded in 1883 and is headquartered in St. Louis, Missouri. Advisors' Opinion: - [By Sherry Jim]
BTU International, Inc.(NASDAQ: BTUI) closing price in the stock market Tuesday, Jan. 3, was $2.5608. BTUI is trading -7.35% below its 50 day moving average and -45.75% below its 200 day moving average. BTUI is -80.90% below its 52-week high of $13.41 and 5.38% above its 52-week low of $2.44. BTUI‘s PE ratio is 12.93 and its market cap is $24.28M . BTU International, Inc. engages in the design, manufacture, sale, and service of thermal processing systems used in various manufacturing processes primarily in the electronics, alternative energy, and automotive industries worldwide.
Best Heal Care Stocks To Own Right Now: Alexion Pharmaceuticals Inc.(ALXN) Alexion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of biologic therapeutic products for treating patients with severe and life-threatening disease states in the United States, Europe, Latin America, Japan, and the Asia Pacific. It focuses on developing products for the treatment of diseases in the areas of hematology, nephrology, neurology, ophthalmology, and cancer. The company develops and commercializes Soliris (eculizumab), a therapeutic product for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), a blood disorder. It also conducts various Phase II clinical trail programs on Soliris for its usage for the treatment of cold agglutinin disease; atypical hemolytic uremic syndrome; presensitized renal transplant; kidney transplant for catastrophic antiphospholipid syndrome; ABO incompatible renal transplant; dense deposit disease; myasthenia gravis; neuromyelitis optica; and dry a ge-related macular degeneration. In addition, the company conducts Phase IV clinical trails on Soliris for its usage for the treatment of PNH registry; and Phase I clinical trails on Samalizumab for the treatment of oncology diseases, such as chronic lymphocytic leukemia and multiple myeloma. Alexion Pharmaceuticals, Inc. serves specialty distributors and specialty pharmacies, which supply physician office clinics, hospital outpatient clinics, infusion clinics, or home health care providers; government agencies; and hospitals, hospital buying groups, pharmacies, other healthcare providers, and distributors. The company was founded in 1992 and is headquartered in Cheshire, Connecticut. Enterprise Group, Inc., through its subsidiary, Enterprise Energy Services Inc., provides pipeline construction and oilfield maintenance services to oil and gas companies, and directional drilling services to utility providers primarily in central and northern Alberta, Canada. Its energy and construction services include pipeline construction, pipeline repair and maintenance, wellhead tie-ins, water injection lines, facilities construction, oilfield hauling, tunneling, directional drilling, underground utilities installation, and road and lease construction. The company�s utility and directional drilling services comprise directional drilling; and installation of underground power, telecommunications, and natural gas lines. It serves providers of telecommunications, cable television, electricity, and natural gas services. The company was formerly known as Enterprise Oilfield Group, Inc. and changed its name to Enterprise Group, Inc. in July 2012. Enterprise Group, Inc. wa s incorporated in 2004 and is headquartered in St. Albert, Canada.
 Getty Images Should you quit now or work another year? This is the question that plagues many soon-to-be retirees. In fact, there's even a term for those suffering from this condition: The work one more year syndrome. Some people who have adequate resources are afraid to retire, fearing that their nest egg won't last through a 30-year retirement. Here are some suggestions for people who have enough money to retire, but feel compelled to stay in the workforce for another year: Have a clear understanding of the 4 percent rule, and create a plan based on accurate knowledge. Retirees generally understand that a sustainable withdrawal percentage is 4 percent annually, but not everyone knows all the intricacies behind this rule of thumb. In order for you to gain more confidence that your portfolio will survive, you need to have a clear understanding of the original study by William Bengen (pdf) and how future changes will affect your assumptions. You should know the asset allocation used, the assumptions made and how the numbers are calculated so you can think for yourself whenever a new published study challenges the numbers. Build reasonable cushions into the plan. Another year of work means a bigger nest egg, but there are also other ways to increase your chances of retirement success. You could develop a detailed budget and identify areas where you could cut spending if market performance doesn't go your way. Your personal inflation rate is also somewhat controllable, and it could be smaller than standard inflation. There are many ways to conservatively plan for retirement, and working longer is just one of them.
Consider adding income that doesn't take much work. Many people with the work-one-more-year mentality think retirement means completely stopping all active income generating activities, but retirement can also mean making a bit of income on the side. For example, perhaps you could invest in physical real estate. Being a landlord is certainly hard work, but it also gives you an additional source of retirement income that generally keeps up with inflation. You could also turn a hobby into a small income-generating venture. There are lots of ways to make more money, and the income generated doesn't have to be huge to improve your retirement finances. Even just a few thousand dollars a year will mean a sizable decrease in how much you need to draw from your nest egg each year. Being flexible with withdrawals will greatly increase the likelihood that you can retire sooner. The 4 percent rule assumes a retiree will start off withdrawing a fixed amount and increase withdrawals by inflation even if the market tanks. In reality, I doubt anyone who actually runs the numbers will do this. You can drastically improve your chances of never depleting your nest egg just by suspending the inflation increase whenever the markets don't cooperate. The good news is that this is usually easily accomplished because you can probably cut out some parts of your budget temporarily without a noticeable sacrifice in comfort. Be optimistic about your future. Future returns may not be as bright as they were in the past, but your portfolio will do fine unless the year you retire is during a significant financial downturn and you aren't flexible with your spending. And even if this unfortunate series of events happens, you can always just find another job. There is no way to know for sure if your nest egg will last your lifetime. But if you take a few precautions, you won't have to spend your retirement years worrying about running out of money. Familiarize yourself with a few strategies that will help you to weather unforeseen events. And then when you hit your retirement savings goal, go ahead and quit your job if you still want to.
In today's low-yield environment investors are scrambling to make up the paltry income found in bonds and are increasingly looking to higher-yielding stocks. In some cases investors are taking on too much risk for the reward of a few extra dollars of income. However, in the case of these three stocks to follow, investors can get their desired income by investing in companies with a secure future. That's why these three stocks are some the best dividend payers in the energy sector today. BreitBurn Energy Partners (NASDAQ: BBEP )
The oil and gas producer is structured like an MLP that most income investors have become well acquainted with these days. The only difference here is that BreitBurn produces oil and gas instead of transporting or storing it. That business�model�and structure has enabled the company to pay a very generous 10% distribution. Further, it strives to deliver best-in-class distribution growth which it recently delivered when it boosted the distribution by 4%. Hot Dividend Companies To Watch In Right Now: First Security Group Inc.(FSGI) First Security Group, Inc. operates as the holding company for FSGBank that provides banking and financial products and services to various communities in eastern and middle Tennessee and northern Georgia. The company offers various deposit services, such as checking, savings, and money market accounts, as well as certificates of deposit. It offers commercial loans, including loans to smaller business ventures, credit lines for working capital, short-term seasonal or inventory financing, and letters of credit; real estate?construction and development loans to residential and commercial contractors and developers; and consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans. The company also offers commercial mortgage loans to finance the purchase of real property; commercial leasing for new and used equipment, fixtures, and furnishings to owner-managed businesses; and leasing for forklifts, heavy equipment, and other machinery to owner-managed businesses primarily in the trucking and construction industries. It also provides trust and investment management, mortgage banking, financial planning, and electronic banking services, such as Internet banking, online bill payment, cash management, ACH originations, wire transfers, direct deposit, traveler?s checks, safe deposit boxes, United States savings bonds, and remote deposit capture, as well as equipment leasing. The company operates 38 full-service banking offices and 1 loan and lease production office. Its market areas include in Bradley, Hamilton, Jackson, Jefferson, Knox, Loudon, McMinn, Monroe, Putnam, and Union counties, Tennessee; and Catoosa and Whitfield counties, Georgia. First Security Group was founded in 1974 and is headquartered in Chattanooga, Tennessee. Hot Dividend Companies To Watch In Right Now: Cedar Shopping Centers Inc (CDR) Cedar Shopping Centers, Inc., real estate investment trust, engages in the ownership, operation, development and redevelopment of supermarket-anchored community shopping centers and drug store-anchored convenience centers in the United States. As of December 31, 2007, it owned 118 properties, aggregating approximately 12.0 million square feet of gross leasable area primarily in Pennsylvania, Massachusetts, Virginia, Ohio, Connecticut, New Jersey, Maryland, Michigan, and New York. Cedar Shopping has elected to be treated as a REIT for federal income tax purposes and would not be subject to federal income tax, if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1984 and is based in Port Washington, New York. Verizon Communications Inc. provides communication services. The company operates through two segments, Domestic Wireless and Wireline. The Domestic Wireless segment offers wireless voice and data services; and sells equipment in the United States. The Wireline segment provides voice, Internet access, broadband video and data, Internet protocol network, network access, long distance, and other services in the United States and internationally. The company serves consumer, business, and government customers, as well as carriers. As of December 31, 2010, its network covered a population of approximately 292 million and provided service to a customer base of approximately 94.1 million. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was founded in 1983 and is based in New York, New York. Advisors' Opinion: - [By Jonas Elmerraji]
The sole downside setup we're looking at today is communications giant Verizon (VZ). Even though Verizon isn't a tech stock in the traditional sense, its exposure to mobile phone sales and its scale as an internet service provider means that its price action correlates highly with the rest of the tech sector. But more recently, that correlation has decoupled thanks to a topping pattern in shares. Verizon is forming a head and shoulders top right now, a bearish pattern that indicates exhaustion among buyers. The head and shoulders is formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head. A breakdown below the pattern's support level, called the neckline, triggers the sell signal for this stock. For Verizon, the sell signal comes in right at $41.50… The head and shoulders may be a popular pattern, but it's also a potent one: a recent academic study conducted by the Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in “profits [that] would have been both statistically and economically significant.” That's a good reason to keep an eye on how this stock trades for the next week. - [By Richard Young]
While AT&T (NYSE:T) has been fighting, and losing, the battle to get T-Mobile’s spectrum, Verizon has been piecing together spectrum from far-flung sources, allowing it to expand its 4G LTE operations. Verizon recently purchased more spectrum from a business consortium, and this month VZ bought more spectrum, this time from Cox — a cable provider. Verizon is inking the deals it needs to keep expanding. The company’s stock yields 5.1% today and has broken out of recent resistance on my price chart. - [By Brian Gorban]
Telecommunications giants Verizon (NYSE: VZ) and AT&T (NYSE: T) are ubiquitous and very well-respected companies that benefit from some compelling competitive advantages. Having well over $110 billion in annual revenue allows both of these firms to benefit from economies of scale, much like Coca-Cola, while each have well over 100 million wireless subscribers giving them a huge advantage of their distant number three competitor, Sprint, which has approximately 55 million. Perhaps most importantly, management has been very kind in rewarding shareholders through billions in share buybacks and current dividend yields at approximately 5%, well ahead of the average 2% Fortune 500 company. Moreover, with the Nokia Lumia 920 smartphone being received comparatively well by the general public and helping improve margins for both companies as these have less costly subsidies than the more expensive Apple iPhone, expect earnings to improve further in the upcoming quarter. Both of these companies are sitting approximately 10% from their highs, while their fundamentals have only improved, so I think these are two solid dividend companies for the long-term income investor to consider adding to their portfolio. I’d like to also say I appreciate you reading my thoughts and reiterate that these are just the views of the blogger and should not serve as a substitute for any professional financial advice or counsel in general. Respectful comments and questions are always welcome below on the comment board.
Hot Dividend Companies To Watch In Right Now: United Bancorp Inc.(UBCP) United Bancorp, Inc. operates as the holding company for The Citizens Savings Bank that provides various commercial and retail banking products and services in the northeastern, eastern, southeastern, and south central Ohio. Its deposit products include interest-bearing deposits, certificates of deposit, demand deposits, savings accounts, NOW accounts, and money market deposits. The company?s loan portfolio comprises commercial, real estate, installment, and consumer loans, as well as letters of credit and lines of credit. It also offers brokerage, night deposit, safe deposit box, and automatic teller machine services. United Bancorp provides banking services through its main office and stand alone operations center in Martins Ferry, Ohio; and 19 branches in Belmont, Harrison, Jefferson, Tuscarawas, Carroll, Athens, Hocking, and Fairfield counties, as well as in the surrounding localities. The company was founded in 1974 and is headquartered in Martins Ferry, Ohio. Hot Dividend Companies To Watch In Right Now: Pepsico Inc.(PEP) PepsiCo, Inc. engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. The company operates in four divisions: PepsiCo Americas Foods (PAF); PepsiCo Americas Beverages (PAB); PepsiCo Europe; and PepsiCo Asia, Middle East, and Africa (AMEA). The PAF division offers Lay?s and Ruffles potato chips, Doritos and Tostitos tortilla chips and dips, Cheetos cheese flavored snacks, Fritos corn chips, Quaker Chewy granola bars, and SunChips multigrain snacks in North America; Quaker oatmeal, Aunt Jemima mixes and syrups, Cap?n Crunch cereal, Quaker grits, and Life cereal, as well as Rice-A-Roni, Pasta Roni, and Near East side dishes in North America; and various snack foods under Doritos, Marias Gamesa, Cheetos, Ruffles, Emperador, Saladitas, Sabritas, and Lay?s brands in Latin America. The PAB division provides carbonated soft drinks, beverage concentrates, fountain syrups, and finished goods under Pepsi, Mountain Dew, Gatorade, 7UP, Tropicana Pure Premium, Electropura, Sierra Mist, Epura, and Mirinda brands; ready-to-drink tea, coffee, and water products through joint ventures with Unilever and Starbucks; and sells concentrate to authorized bottlers, and branded finished goods directly to independent distributors and retailers. This division also manufactures third-party brands, such as Dr Pepper, Crush, Rock Star, and Muscle Milk. The PepsiCo Europe division offers Frito Lay Snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices, and Quaker foods in Europe. The AMEA division provides snack food under the Lay?s, Kurkure, Chipsy, Doritos, Smith?s, Cheetos, Red Rock Deli, and Ruffles brands; Quaker-brand cereals and snacks; and beverage concentrates, fountain syrups, and finished goods under the Pepsi, Mirinda, 7UP, and Mountain Dew brands. PepsiCo, Inc. was founded in 1898 and is headquartered in Purchase, New York. Advisors' Opinion: - [By Hesler]
PepsiCo, Inc. (PEP) engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. The company has raised distributions for 39 years in a row. The 10 year annual dividend growth rate is 13%/year. The last dividend increase was 7.30% to 51.50 cents/share. Analysts are expecting that PepsiCo will earn $4.65/share in 2012. I expect that the quarterly dividend will reach 55 cents/share in 2012. Yield: 3.20%
Hot Dividend Companies To Watch In Right Now: Merck & Company Inc.(MRK) Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company?s Pharmaceutical segment provides human health pharmaceutical products, such as therapeutic and preventive agents for the treatment of human disorders in the areas of bone, respiratory, immunology, dermatology, cardiovascular, diabetes and obesity, infectious diseases, neurosciences and ophthalmology, oncology, vaccines, and women's health and endocrine. This segment also offers human health vaccines, such as preventive pediatric, adolescent, and adult vaccines. Its Animal Health segment discovers, develops, manufactures, and markets animal health products. This segment offers antibiotics, anti-inflammatory products, vaccines, products for the treatment of fertility disorders, and parasiticides for cattle, swine, horses, poultry, dogs, cats, salmons, and fish. The Consumer Care segment develops, manufac tures, and markets over-the-counter, foot care, and sun care products. Its over-the-counter product line includes non-drowsy antihistamines; treatment for occasional constipation; decongestant-free cold/flu medicine for people with high blood pressure; nasal decongestant spray; and treatment for frequent heartburn. This segment?s foot care products comprise topical antifungal, and foot and sneaker odor/wetness products; and sun care products include sun care lotions, sprays and dry oils; and sunburn relief products. The company serves drug wholesalers and retailers, hospitals, government agencies, physicians, physician distributors, veterinarians, animal producers, and managed health care providers, as well as food chain and mass merchandiser outlets in the United States and Canada. Merck & Co., Inc. was founded in 1891 and is headquartered in Whitehouse Station, New Jersey. Advisors' Opinion: - [By McWillams]
Merck & Co. Inc. (NYSE: MRK : 31.91, 0.05) reported net income of $2.02 billion, or 65 cents per share in its fiscal 2011 second quarter, compared to net income of $752 million or 24 cents a year ago. Analysts had estimated earnings of 95 cents per share for the firm. The company's revenue rose 7 percent to $12.15 billion, better than analysts' forecast of $11.82 billion. Shares closed Thursday's trading at $34.93.
Pipeline companies have a lot of enemies out there right now, mostly in the form of ordinary citizens and environmentalists who are wary of leaks. In this video, Fool.com contributor Aimee Duffy looks at Enbridge Energy Partners (NYSE: EEP ) and its most recent battle -- not with concerned citizens, but with another pipeline company -- over the presence of high levels of hydrogen sulfide in the crude oil being delivered to its rail loading facility in North Dakota. The surge in oil and natural gas production from the fracking movement is creating massive bottlenecks in takeaway capacity. However, this problem for producers creates an immensely profitable opportunity for midstream companies. Energy Transfer Partners is a company that helps alleviate the gluts in supply with its 23,500 miles of transformational pipelines. To see if ETP and its sizable dividend payment could be a good fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for a thorough expert analysis of this midstream company.
Emerging-market stocks fell for the first time in four days after HSBC Holdings Plc (HSBA) said slower growth in developing economies curbed profit and investors speculated the U.S. Federal Reserve will reduce stimulus soon. Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. dropped at least 1 percent in Hong Kong after HSBC said the mainland Chinese market slowed unexpectedly. Longfor Properties fell the most in three weeks after China's top planning body reiterated the government would maintain curbs on the real-estate industry. Benchmark indexes in the Philippines, Poland and Russia lost at least 0.5 percent as better-than-expected U.S. service industries data fueled speculation the Fed will scale back monthly bond purchases. The MSCI Emerging Markets Index lost 0.7 percent to 949.89 at 4:20 p.m. in Hong Kong. The HSBC Emerging Markets Future Output Index, a monthly gauge of company executives' expectations for production in a year, contracted for the first time since April 2009, HSBC said. Fed Bank of Dallas President Richard Fisher warned investors yesterday not to rely on the central bank's $85 billion in monthly bond purchases. "Capital is flowing out of developing nations on expectations that the U.S. will cut its monetary stimulus, which will eventually happen in October," said Wu Kan, a Shanghai-based fund manager at Dragon Life Insurance Co., which oversees $3.3 billion in assets. "Fund outflows will exacerbate the situation of slowing growth in developing countries." Technology, Financials India's rupee declined to a record low of 61.81 per dollar today, while most currencies among developing Asian nations also weakened. Trading volume in India's S&P BSE Sensex Index was 25 percent above the 30-day average for the time of day. Gauges of technology and materials stocks in the MSCI Emerging Markets Index fell, the biggest decliners among 10 industry groups. The broader gauge has lost 10 percent this year, compared with a 14 percent increase in the MSCI World Index. The developing-nation gauge trades at 10 times projected 12-month earnings, compared with the MSCI World's 14 times, according to data compiled by Bloomberg. ICBC, China's biggest listed lender, fell 1.4 percent. Construction Bank, the second largest, slid 1.2 percent. HSBC, Europe's biggest bank, declined in London and Hong Kong trading after profit missed analysts' estimates. First-half net income rose 22 percent to $10.28 billion, the London-based lender said yesterday in a statement. That was less than the $10.57 billion estimate of five analysts surveyed by Bloomberg. Property Curbs Longfor lost 2.4 percent in Hong Kong, poised for its biggest decline since July 16. China will maintain its current macro-control policies for the property industry, the official Xinhua News Agency reported yesterday, citing Xu Shaoshi, chairman of the National Development & Reform Commission. Tofas Turk Otomobil Fabrikasi AS (TOASO), the Turkish carmaker co-owned by Fiat SpA, slid 3.5 percent in Istanbul. The company reported second-quarter profit of 109.2 million liras ($56.5 million), trailing the average estimate of 127.6 million liras in a Bloomberg survey of 11 analysts. Lee & Man Paper Manufacturing Ltd. (2314) tumbled 9.8 percent in Hong Kong, heading for the biggest loss since October 2011. Credit Suisse Group AG downgraded its rating on the stock to underperform on lower-than-expected industry margins. TPK Holding Co., a supplier of touch screens to Apple Inc., slumped 4.4 percent in Taipei. The company reported net income of NT$3.14 billion ($105 million) for the quarter ended June 30, compared with the median estimate of NT$3.19 billion in a Bloomberg survey. Simplo Technology Co. (6121), a maker of lithium batteries, surged 4.7 percent in Taipei after reporting profit of NT$650 million, compared with the median NT$620 million forecast of analysts.
When Netflix (NASDAQ: NFLX ) CEO Reed Hastings copped to an ill-advised price hike two years ago -- only to announce Qwikster, an even worse idea, the same day -- thousands of subscribers ran for the hills. Hastings and his team didn't fully understand how much customers valued simplicity. Netflix was boosting prices for all the wrong reasons, as the 2011 exodus made clear. This time, Netflix was prepared. We've known for a while that Netflix planned to boost the monthly rate from $7.99 to $11.99 on accounts that use multiple devices to stream several programs at a time. Hastings and Netflix first floated a trial balloon in April, following a blowout earnings report. Yesterday, during what was to be a planned lunchtime viewing of Warehouse 13, I saw the plan in action. I'd either have to upgrade our account or kick one or all of my kids off their iPads. So, I caved. And I'm glad I did. See, that night, Netflix introduced Profiles. We didn't see the feature immediately -- a customer-service rep I contacted said Netflix was performing a staged rollout of Profiles to all members, presumably in an effort to prevent a rush on its servers. Profiles make it easy for separate family members to log in and see recommendations tailored only to their viewing history. What's more, I can tailor parental controls for each one of our kids' Profiles, the rep said. Sources: YouTube, Netflix. I've yet to fully explore everything that's possible with Profiles, but as an investor, I love that Netflix's optional price hike is tied to a new and potentially useful feature. A Qwikster moment, this isn't. Hastings needs more tests like this to regain the confidence of subscribers and investors who might have felt Netflix was abusing its market position two years ago. Since, Amazon.com (NASDAQ: AMZN ) has introduced new original series, signed exclusive deals, and generally improved the quality of the Instant Video product. Walt Disney (NYSE: DIS ) , 21st Century Fox, and NBC Universal have invested a fresh $750 million in Hulu. In short: Netflix has more to lose now, which would be a problem if Hastings had not learned from his mistakes. Fortunately that doesn't seem to be the case. Or at least that's what I think. Do you agree? Would you buy, sell, or short Netflix stock now? Leave a comment to let us know what you think. From tailored profiles to original series to tablet TV, the television landscape is changing quickly, with new entrants like Netflix and Amazon.com disrupting traditional networks. The Motley Fool's new free report "Who Will Own the Future of Television?" shows you the risks and opportunities of in TV stocks now. Click here to read the full report!
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