Opinion: Forget Buffett — four unsung investment gurus are picking these eight stocks for 2017
By Michael Brush Published: Jan 4, 2017 5:21 a.m. ET
Here’s a worthy New Year’s resolution for you: Stop paying so much attention to financial-market icons. You know who I mean. I’m talking about the likes of Warren Buffett, Carl Icahn, George Soros and Bill Ackman. Instead, look beyond the media spotlight to a lesser-known group of successful gurus: investment-newsletter writers. After all, these unsung market heroes regularly perform well. And they are more open about their favorite stocks. One problem here is that you’ll have trouble identifying the best investment letter writers in the future. That’s because Mark Hulbert sadly pulled the plug on his long-standing letter-writer ranking service last year. Fortunately, a little secret to Hulbert’s system was that a small group of letter writers consistently dominated the performance lists. I’ve gotten to know this small group of elite performers because I’ve consulted with Hulbert over the past 15 years to tap the best letter writers for an annual New Year’s outlook and favored stock picks.
Opinion: A Good Trick to Picking the Best Dividend Stocks
CHAPEL HILL, N.C. (MarketWatch) — The Dogs of the Dow are barking again, but watch out for their bite.
I’m referring to the strategy that, each January, invests in the 10 Dow Jones Industrial Average stocks with the highest dividend yields. The Dogs of the Dow performed well in the first quarter after several years of underperformance.
But the strategy’s long-term record is spotty, at best. The Hulbert Financial Digest’s performance monitoring shows that there are much better ways of picking dividend-paying stocks.
Over the past 20 calendar years, for example, the Dogs of the Dow strategy has beaten the Dow itself in just seven of them — or 35% of the time. Nor did those seven winning years make up for the 13 losers: Cumulatively over those two decades,
according to data from www.DogsoftheDow.com, the strategy has lagged behind the Dow by an annualized margin of 4.2% to 6.3%.
4 Dividend Stocks That Will Make Your Portfolio Blossom
The Federal Reserve appears on the verge of finally raising short-term interest rates for the first time since the bank dropped it to zero during the 2008 global financial crisis. The shift toward a higher interest rate environment will be
positive for retirees, who often rely on interest rate returns for an income stream.
Don't get too excited, though. The Fed is expected to hike interest rates at a slow and measured pace to maintain financial market equilibrium and avoid shocking the economy and overall growth. This means income-oriented investors still need
to look for other sources of income beyond traditional certificates of deposit and other bank interest-bearing accounts.
Dividend investing, or choosing stocks with a reliable cash payout, is a proven strategy. “In the stock market, there are two paths to return on investment: capital appreciation and dividends. Of the two paths, the only one with any reliability
is the cash dividend,” says Kelley Wright, chief investment officer of IQ Trends Private Client Asset Management, a Carlsbad, California-based registered investment advisory company.
Investors seeking a reliable rate of return can look to blue-chip dividend-paying stocks with confidence. “The cash dividend is a company policy. It must be voted on, declared and authorized by the board of directors, who arguably know the
current condition of the company better than anyone else, as well as the prospects for the future. The cash dividend has a record date, an ex-date and a pay date,” Wright says.
IQ Trends: Valuation Matters
Our raison d'être is value identification, which is to say we identify the repetitive areas of high and low dividend yield, explains Kelley Wright, editor of Investment Quality Trends.
This approach lets us establish the buying area with the least downside risk and the selling area that captures the lion's share of price appreciation, dividends, and dividend increases. I was recently interviewed, and asked, “What does IQ
Trends do now that for all intents and purposes value identification is no longer necessary because the Fed has taken all of the risk out of owning stocks.”
Huh? Are you kidding me? No, seriously, he really asked me this question with a straight face. As you might guess the balance of the conversation was me explaining why this was absurd. Yes, investors have become complacent because we haven't
seen as much as a 10% correction since, oh, 2011. But complacency is the result of near-time bias; the belief that the most recent will last ad infinitum. Past events fade away in the memory until they are forgotten or dismissed.
The fact of the matter is that the Fed's Zero Interest Rate Policy (ZIRP) will not last forever. At some point, interest rates will start to rise again.