Home

Forgot?

Financial Inbox

April 17, 2014
Successful Investing

This content is for paid subscribers only. Click here to subscribe.

April 16, 2014

If you were looking for a reason to be cautious about the financial markets, then last week’s action in stocks offered you one giant yellow light. The selling in domestic stocks nearly across the board pushed the major U.S. averages below their 50-day moving averages last week, a first salvo in what could well be a wider sell-off. Now, the breaking of the 50-day average does not mean that this current bull market is over, or that U.S. stocks now are headed into a downward spiral. The price action on Monday certainly was a positive for the bulls; however, what I do think is important is to view last week’s big selling as an early warning for the markets at large. Take a look at the charts here of the price action during the past 12 months (through 4/14). As you can see, stocks in the SPDR S&P 500 (SPY) recently fell below the 50-day average, as did stocks in the PowerShares QQQ Trust (QQQ). I do think the breakdown in the domestic equities last week does require you to take a look at how much equity exposure and risk you have in your portfolio. Now, one thing to keep in mind is that every significant market pullback during the past 15 months actually has been a buying opportunity. If recent historical trends continue, then the yellow warning light we saw last week also may be a buy signal. However, I do suspect that the characteristics of this current pullback [...]

April 11, 2014
Successful Investing

This content is for paid subscribers only. Click here to subscribe.

April 9, 2014

If there is one thing that every investor should understand, it is that often the conventional wisdom on Wall Street just doesn’t play out. A prime example of this situation is the downtrend in interest rates so far in 2014. At the beginning of the year, the U.S. Federal Reserve began the much-talked about “taper” of quantitative easing, or QE. So far, the Fed has reduced its bond buying from $85 billion per month down to $55 billion per month. Conventional wisdom says that the reduction in bond buying from the Fed should have caused interest rates to rise. However, this just hasn’t happened yet. As of this writing, the yield on the benchmark 10-Year Treasury Note is just above 2.7%. That metric is way down from the 2.99% level on Jan. 2. In percentage terms, that’s more than a 10% drop in yield — a move that’s left a lot of bond watchers scratching their heads in amazement. So, why have rates been so low despite the Fed’s tapering? A recent editorial in the Wall Street Journal by E.S. Browning does a good job of shedding some light on the issue, offering up sound reasoning as to why. First off, the decline in interest rates this year is largely symptomatic of concerns about weak foreign economic growth, as well as sluggish economic data here at home. Tepid global and U.S. growth also has kept core inflation metrics below the Fed’s target of 2%. Yields are sensitive to inflation, and [...]

Making Money Alert: Yellow Warning Light from U.S. Stocks

April 17, 2014

If you were looking for a reason to be cautious about the financial markets, then last week’s action in stocks offered you one giant yellow light. The selling in domestic stocks nearly across the board pushed the major U.S. averages below their 50-day moving averages last week, a first salvo in what could well be a wider sell-off. Now, the breaking of the 50-day average does not mean that this current bull market is over, or that U.S. stocks now are headed into a downward spiral. The price action on Monday certainly was a positive for the bulls; however, what I do think is important is to view last week’s big selling as an early warning for the markets at large. Take a look at the charts here of the price action during the past 12 months (through 4/14). As you can see, stocks in the SPDR S&P 500 (SPY) recently fell below the 50-day average, as did stocks in the PowerShares QQQ Trust (QQQ). I do think the breakdown in the domestic equities last week does require you to take a look at how much equity exposure and risk you have in your portfolio. Now, one thing to keep in mind is...

Recent Video alerts
Successful Investing
Subscriber Tools »

Welcome to Successful Investing

Investors have become complacent. Stocks are near all-time highs. Volatility is low. It's almost like investors are blind to the three coming catastrophes that can crash the market 30% or more in 2013:...
Current Recommendations
Fund Allocation
abc
25%
def
25%
ghi
25%
jkl
25%
Name Ticker Date Buy Price Stop Price
number 1 abc 08/30/2009 19.74 17.74
number 2 def 10/13/2009 19.72 17.72
number 3 ghi 05/15/2009 19.35 17.35
number 4 jkl 03/30/2009 20.08 17.08