The bubble conditions in the stock market prevail, enabled by the most aggressive and prolonged period of monetary stimulus in the history of the Federal Reserve. Recent IPO activity is emblematic of the speculation that is drowning out thoughtful investment analysis. With the economy poised to grow modestly and Fed Chair Janet Yellen keeping the monetary stimulus at full throttle, the nascent bubble in the U.S. stock market is likely to become larger. You are welcome to hop on Yellen's bubble-coaster and ride it as high as it will take you, but you'd better figure out a strategy for jumping off the ride at the top, because it is a long, steep ride down. We want no part of it. Instead, I advise that you follow in the footsteps of the famed John Templeton. His advice to do something different from the majority is the strategy that can help you achieve long-term investment success. If your investment philosophy seems unconventional in the current environment, you're following the proper course of action. While many investors are focused on social networking stocks and biotechs, we prefer to focus on the materials sector, where sentiment is dismal. In this month's issue, I'm recommending a starter position in an out-of-favor copper miner with a rock-solid balance sheet. Over the past three years, it has returned almost half of its profits to shareholders in the form of regular and special dividends. More >>
After a brief pause to start the year, stocks appear to be continuing their speculative overshoot phase. Although the market is basically flat YTD, there is rampant speculation bubbling under the surface. Margin debt is at yet another record high, and the most speculative shares are once again dominating the headlines. Facebook is spending over $19 billion in cash and overvalued stock on a company with $20 million in sales that didn't exist before 2009. Tesla Motors shares have soared on the pie-in-the sky analysis of a Wall Street analyst who doubled his price target days before his firm helped Tesla issue a $2 billion convertible bond. At their recent peak, Tesla shares were up more than 70% YTD and 600% over the last twelve months.
If you are a long-time reader of Global Investment Strategy (or Intelligence Report) you know our advised strategy for you is to craft a global portfolio of high-yielding dividend-payers with a record of regular dividend increases. Over the last 40 years, dividends and the reinvestment of dividends have accounted for over 70% of the S&P 500's total return. Of course, once you have settled on a dividend strategy you must decide which dividend-payers to buy. At Young Research, an important feature of our investment strategy is to find companies with high dividend yields and a history of regular dividend increases. This month, we have a new one for you: a Canadian-based electric and gas utility that offers a high dividend yield today and has a long history of regular dividend increases. More >>
April 24, 2014
Not much has changed in the bond ratings world. The three major ratings agencies completely missed the real estate crash. And today they operate as if it never happened. Timothy Martin reports here. Six years after getting a failing grade for their role in the financial crisis, credit-rating firms are at the top of the […]More »
The Young Research Commodities chart book includes price, both real and nominal, for different time periods and annual rates of change for the commodities covered on the Global Investment Scorecard.
The Young Research Equities chart book includes a range of charts featuring indicators on stock market valuation, sentiment, relative strength, etc. for U.S. stocks over a variety of timescales.
The Young Research U.S. Economy chart book includes short and long-term charts on output and activity, the labor market, inflation, and consumer and business sentiment.
Since 1896, the average bull market has lasted 835 days and resulted in a doubling of stock prices. For more historical perspective on the duration and magnitude of bull and bear markets, check out our new Dow Bull and Bear Markets table.
Our Credit Markets chart book includes many of the charts we monitor and use regularly to formulate fixed-income investment strategy. The chart book includes long-term charts on nominal and inflation-adjusted treasury rates, policy rates, interest rate valuation indicators, and credit spreads.
Jeremy Jones, CFA, is the director of research for Young Research & Publishing and editor of the Global Investment Strategy newsletter. Jeremy is also the Chief Investment Officer at Richard C. Young & Co., Ltd., an investment advisor to high net-worth families and businesses. More »