April 29, 2013
As the bull market climbs to its peak, you should turn your attention to how you can preserve the gains we've enjoyed over this 49-month bull run.
Bottom line: Trim your stock allocation, and buy only defensive names that are genuinely undervalued. Certain stocks in the energy sector fit those criteria to a T. I'll share one with you that is deeply undervalued and yields near 5%.More »
April 22, 2013
As the bull market stampedes ahead in the U.S., it takes some creativity to find income-generating investments at a discount price.
I advise investors channel new cash into what I call 'stock substitutes'– assets that generate good income, with the prospect of some capital appreciation too.More »
December 20, 2012
Every investor slips on a banana peel now and then. (Even the great Warren Buffett had to take $1.4 billion of writedowns in 2010 and 2011 on some Texas utility bonds he bought during the mid-decade energy boom.) But some errors can easily be avoided–if you're willing to follow a few basic rules and use common sense.
Here are five bloopers that don't have to trip you up in the New Year. Take the proper steps to correct your game now, and you'll be richer for it in 2013.More »
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 »
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 »
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 »
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 »
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 »
Richard E. Band is the newsletter world's #1 authority on investing for low-risk growth. His flagship Total Return Portfolio has quintupled in value since its inception in 1990, while taking far less risk than the popular stock market index funds. More »
I am fortunate to have built a significant nest egg, big enough to leave in cash and not worry about inflation. So I have a low risk tolerance and avoid individual equities. But since cash pays nothing, I am willing to expose funds to minor risk and have followed your MLP, Vanguard and DoubleLine recommendations. Those alone have more than paid for my lifetime subscription to your newsletter. Thank you.
–J.P., Candler, NC