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Journal

  • Meet My Friend Spike

    Thu, 16 May 2013 19:43:40 ET

    Stocks took a brief respite today from their torrid advance, with the Dow closing down 42 points. It's becoming increasingly apparent, though, that we're in the midst of a fairly unusual, but not unheard-of, market phenomenon, which I call The Spike. More »

  • Our Task: Stay on Task

    Tue, 14 May 2013 19:45:34 ET

    I rub my eyes, shake my head. What's the S&P doing at these levels, up 15.7% year to date? It's beyond the beyond, over the top. But we'll stay focused on the task at hand–to earn the highest returns we can, without exposing ourselves to a boomerang shot if (when) the crowd suddenly wakes up and realizes it has been bagged. More »

  • After-Dinner Snooze

    Thu, 09 May 2013 17:54:59 ET

    Like many folks, Mr. Market enjoys taking a brief snooze after a big meal. That may be what he has in mind right now. Stocks pulled back a bit today, with the S&P 500 index notching its deepest percentage loss in three weeks -- despite good news on initial jobless claims, which fell last week to their lowest level since January 2008. More »

Latest Issue

  • May 2013 Issue & Supplement

    The stock market’s four-year bull run has showered us with bountiful profits. However, we’re entering a new phase, signaled by the Dow’s 265-point plunge on April 15, where interruptions (“corrections”) become more frequent, more sudden and more unnerving. To cope, you’ll want to build a strong defensive component into your investments. Because one day, inevitably, the pullback will be from the market’s ultimate cyclical top.

    In this month’s visit, I’ll show you how to prepare, gradually and at your own pace, for this momentous shift. It’s still OK to buy selectively among the handful of stocks that offer superior long-term value, such as two of my favorite picks from the energy sector, featuring plump dividend yields along with generous appreciation potential through 2015 and beyond. But it’s also important to diversify beyond common stocks. I’ll introduce you to an array of bond funds that let you earn a much higher income than U.S. Treasuries (or most stocks) do, with far less risk to your principal. Later, I’ll update you on a diversifier that has gotten a bad rap lately—precious metals. First, though, let’s find out what a “cyclical top,” when it arrives, could mean for stocks—and what you should do even now to start readying your portfolio for it. More »

Calendar

Ask Richard

If Roth IRAs are tax-free, how come I can't hold master limited partnerships (MLPs) in them?

Because of a quirk in the tax law, Uncle Sam may deem part of your MLP earnings to be Unrelated Business Taxable Income. As stated in IRS publication 598 under 'Organizations Subject to the Tax,' if you hold an MLP inside a retirement account, you'll owe income tax on any UBTI credited to you above $1,000 a year. IRAs including Roth IRAs are subject to this tax. So you should only hold individual MLPs in a taxable account. And because individual MLPs issue a complex form called a K-1 at tax time instead of a 1099, you may also need a professional tax preparer to help you place all the numbers in the right slots on your return. Of course, there's a way around both of these complications. More »

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