Beating The Stock Market » Economy

Finding The Best-Suited Funds For Your IRA

joanne — Wed, 28 Apr 2010 02:55:04 +0000

Investing hard-earned money in Individual Retirement Funds can be risky, but there are IRA funds that have been performing very well and would definitely be wise to consider. Dodge and Cox Stock has proven to be a reliable fund since its start in 1965. Sometimes going with an older fund is a good idea. The strong performance of Dodge and Cox makes it a good choice for those who are interested in dividend-oriented portfolios and strong risk-adjusted returns.

Vanguard REIT Index Fund has proven to be another fund with good performance. Even though real estate has been risky of late, this fund has been doing very well, especially considering that REITs must distribute 90% of earnings to shareholders every year. Real estate allows for a more diversified portfolio and is a good choice for an IRA fund.

Roth IRAs have always been a good option for IRA investing. After age 59 and 1/2, withdrawals are not taxed, and the rules for withdrawal are more flexible to work with. And since contributions can be withdrawn without the risk of penalty or taxes, Roth IRAs are a good choice if money may be needed sooner rather than later.

Another good choice would be the Vanguard Total Bond Market Index Fund. Half of its portfolio deals in agency and Treasury bonds and the other half in corporate bonds. This fund is expected to perform well in years to come.

Third Avenue Value has been performing reasonably well in the last ten years. Considering the state of the economy, this fund is still doing better than others. It might be worth checking into as an IRA investment. The funds listed here are options to consider when looking for the best IRA funds. Retirement should be relaxing and worry-free, and good investing today can contribute towards a happier tomorrow.

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Top Gold ETF To Buy

joanne — Mon, 26 Apr 2010 16:34:07 +0000

For those of you considering investing in gold as a preventative measure against paper currencies and the mismanagement of governments, the best loved and unarguable top gold ETF to buy is GLD – also called SPDR Gold Shares. The unique feature of this Gold ETF centers on its relationship literally matching the valuation of gold. Although one could reasonably assume this to be standard, where ETF’s, or Exchange Traded Funds are concerned, it is certainly not. Numerous ETF’s operate with futures contracts that are generally less predictable and so riskier investments. Although past performance is no guarantee of future results, gold ETF funds like GLD, prove to be a less risky option than alternative commodity investments, particularly for those that understand well what is happening with the economic picture.

There are those investors who feel confidant that deflation has already begun, and that would prove to be gold bearish. A few of them will indicate television advertising, claiming that after the public catches on to an investment, it is time to sell. Yet different investors believe that because of the government running the printing presses overtime to create more money, the value of gold will keep going up. Gold more or less proves to be protection against a declining dollar, and its performance is based on other country’s currencies and economies as much as it is on those of ours. Could our economy perform sufficiently for us to build up our currency’s value, or might we have to maintain a weaker dollar to be able to compete internationally? Perhaps more involved than before in history, this involves a complex series of actions and reactions.

Despite all of the background noise going on, a constant concept emerges. The majority of both gold bears and bulls concur with gold maintaining the upward trend over both the medium time frame, as well as internationally. A number of investors today feel certain that one day the specter of hyperinflation will rear its ugly head, causing GLD, and also UGL (ProShares Ultra Gold), to both be solid investment ideas for all long term minded investors.

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Economic Recovery?

joanne — Thu, 15 Apr 2010 12:00:54 +0000

The Federal Reserve Chairman Ben Bernanke stated today that the economic recovery is sustainable. Along with the news of retail sales are up in the last month, one would think that this is the time to get in on the stock market. Well before you do, you need to be aware of a few things first.

The stock market (Dow Jones Industrial Average) has reached a new twelve month high after climbing 12% over the last two months and over 40 % year-to-date. Those are some great impressive gains, but does that mean that the markets will continue on this upward path? Well that’s anyone’s guess.

The last time the Dow was at these levels along with the S&P sitting at 1200, was in September of 2008. You have to ask yourself, “What was the condition of the economy in September 2008?” I did some research into this issue and found that this might not be the time to invest in the stock market.

In Sept., 2008, unemployment was at 6.2%. The foreclosure rate hasn’t slowed down. It’s estimated that 1 in every 538 homes are in foreclosure as of march 2010. The Federal reserve has printed so much more U.S. currency that it’s not even funny.

My point being that you should be waiting for a healthy pull back (8%-10%) before investing any capital.
You also have to look into the future of the economy too. Economics believe that the unemployment rate will still be at 8.4% at the end of 2011. Home prices will remain at near flat levels for the next two years. They also expect the economy to only grow 3% in 2010.

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Investing In The Energy Sector

joanne — Sun, 31 Jan 2010 00:11:44 +0000

Broadly speaking, the energy sector refers to that sector of the economy that is comprised of a wide variety of stocks (public shares in companies) that have energy production as their essential business. Examples, of these energy stocks include oil companies like Conoco Phillips or Exxon, coal companies, and even “green” energy companies like First Solar which attempts to capitalize on solar energy. As these examples show, some of these stocks may be foreign (for example, Conoco Phillips is Canadian), or U.S. companies (for example, First Solar).

Of course, some U.S. companies do business overseas (for example, Exxon). Thus, an investment in the energy sector may involve the purchase of these different kinds of stocks and many others that fit this description, and it sometimes wise for an investor to consider what element(s) of the business sector is most appealing, given that investor’s beliefs about what types of energy are apt to be particularly fast growing enterprises or what areas of the world are most apt to need and have the ability to expand energy production. An investor can purchase individual energy stocks or a stock fund in which the fund manager has assembled a group of stocks that all share in common a primary involvement in energy production.

This too becomes a consideration, since an investor may have more confidence that a single company will do well in the future than a group of related but different companies or may dislike the idea of investing entirely in a single company and prefer a wider bet that the energy sector will do well, whether a given company does or not. If the intent is to invest in the energy sector, it is generally best to purchase a mutual fund run by a good fund manager with low overhead costs in order to place a wide bet on this sector of the economy generally.

With this decision made, the next step is to research various mutual funds, perhaps through a fund rating company like Morning Star,in order to determine which mutual fund might be purchasing those energy stocks the investor most likes, in the region of the world that the investor believes to be most ripe for fast growth, managed by a fund manager with a good track record, and set up to minimize the overhead costs (for example, the management fees and the commission costs at purchase and sale of the mutual fund). In my judgment, the new investor should always look first at the Vanguard mutual funds.

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New Home Sales Report For July

billy — Fri, 28 Aug 2009 01:56:35 +0000

Yesterday the news came out that new home sales jumped 9.6% for the month of July. It was the fourth straight increase in sales. Sales rose to an annual rate of 433,000, up from June’s rate of 395,000. Many are saying that the bottom is definitely in and now is the time to buy, but is that really the case.
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Yes, sales are up more than 30% from the bottom in January, but nowhere near the peak of four years ago. Of course that’s was because of the inflated bubble that was created by the Fannie Mae and Freddie Mac sub-prime loans.
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So does this really mean that the bottom is in and we can expect the economy to turn around? I doubt it. Why I think that is because of the fact that the numbers are (I feel) are mis-leading. Many of the new home sales that have been happening in the last month or so were first-time home buyers. That’s because of the government’s incentive plan for first-time homeowners who qualify for an $8000 tax credit. That in itself is misleading on the fact of it’s a tax credit, not a rebate. Which means of you don’t have enough of tax liability, you won’t be able to write off all of the $8000.
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What does that mean for the industry? Well, home builders saw a jump in their stock price today, but will it be able to maintain those levels? I doubt that too. mainly because when the program will be terminated at the end of November. I believe the market will dry up again with sales. As it is, some builders have already seen a dip in home sales. In Arizona, A.F. Sterling Homes stated that sales in July stalled because the builder couldn’t guarantee the homes would be completed in time to qualify. The industry (real estate agents and builders) are really leaning on Congress to extend the the credit on the grounds of the sales could reverse from their current trend. As a matter of fact, Randy Agron, the vice president of A.F. Sterling Homes was quoted as saying “The real estate market is really a fragile thing. It’s not the right time to take (the tax credit) away”.
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With that in mind, do you really think the bottom is in? It has been proven in the past that when the government gets involved with trying to “save” the economy, it actually extends it by not letting the free market follow it’s natural course. With this program as well as the financial bailouts and “Cash For Clunkers”, we have three major industries being manipulated within the American economy.
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All I can say is…hang on, it’s going to be a bumpy ride.

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The Dow At 9000, Where Do We Go From Here?

billy — Fri, 24 Jul 2009 12:04:07 +0000

Who would have thought that this could have happened so soon? Either way, it was reached. The DOW close above 9000 (9069.29 to be exact). The S&P 500 has been on a tear, closing at 976.29. Lets not forget that the NASDAQ is now at 1973.60. The past two weeks of trading have been great for the markets.
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With that being said, what are we to expect in the coming weeks? If you’ve been listening to the talk on the street, you’ve heard both sides of the possibilities. “It’s only going to get higher” or “the markets are going to correct themselves”. Those are the only two choices.
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After listening to all the opinions that where flying today, I would have to agree that the markets are due for a correction. How can it not? I don’t know about you, but I don’t really see a reason to be all optimistic about the stock market. Add on to the fact that many traders and investors have made a lot of money in the last four months. There will be some profit taking very soon.
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With all the talk about health care and the Cap and Trade bill, if these two bills pass, corporations are going to find it hard to keep making the earnings that the investors want to see. The taxes that will be imposed onto these industries are going to break them as well as the country’s GDP.
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In the last few months I’ve made some great gains in the markets and I’m not willing to give them back anytime soon. At this time I’m sitting more than half my portfolio on the sidelines, while I wait for the other shoe to drop (and it will). Don’t get me wrong, I do believe that there will be some gains to be made in many other sectors and that’s why I’m watching the tech sector. They (tech sector) don’t have the government issues to deal with, like most of the others ones.
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Which ever way you plan on playing the markets in the coming weeks, do your due diligence.

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Great Gains So Far For This Week

billy — Thu, 16 Jul 2009 20:12:28 +0000

I’ve been busy this week with many things, so keeping an eye on the stock market hasn’t been easy for me. Well this afternoon I’ve had the time to see the progress for the past few days and I’m amazed at the gains that have been made this week by the major indicies.
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I told you in a recent post that I jumped out of basically everything until the markets correct themselves again. We’ve had too much of a run up and I’m skeptical. Looking back on the past few days that I missed, I noticed that there were good opportunities to make money on stocks that I sold and they went on a roller coaster ride afterward.
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The one I want to talk about is Agnico-Eagle Mines Ltd. (NYSE:AEM), a stock that was as high as $62 only five weeks ago. I made the right choice to sell off my position. After it corrected by 10% I bought a small position back. I let it just sit there not bothering to pick up more as it continued to drop. Unknown to me, I wasn’t paying attention to what the stock did this week as it dropped down to below $47.50. If I was aware of the situation, I would have back the truck up so fast to grab shares at that price. That was Monday morning and now the price per share is $55 (as of 3:45pm). A 16% gain in just three trading days.
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In all the times that I’ve traded AEM, I’ve always made money. This would have been great to profit from, but I’m not going to drive myself crazy because I didn’t get into this play. There will always be more opportunities to make money, but if you want to stay sane while trading stocks, you can’t sit there and think of the “what if’s”.
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Agnico Eagle has been trading within a range of $45 to $60 (which is a nice swing gap) this entire calendar year. When the price drops below $50 I buy quite a bit, as it goes above $55 I prepare to sell. This week was a good opportunity to do exactly that and I’m OK with the fact that I missed it.
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Try to keep that in mind as you go through your portfolio.

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Second Quarter Earnings Report Season

billy — Mon, 06 Jul 2009 08:00:43 +0000

It’s that time of year again that comes every three months. That’s right, it’s time for earnings reports. Alcoa (NYSE:AA) is the first company to come out with their results for the second quarter for 2009 (actually it’s just that they are the biggest company to report). Alcoa will release their report after the closing bell on Wednesday July 8th.
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After last week’s debauchery, who really know what to expect. I not expecting anything good from any one company, so I will be watching the companies that I favor to buy on the dips. I’ve again back out of a lot of the positions I had in the past couple of weeks, so I’m in a good position to pick up some of the companies I was in at a lower price. Unfortunately, I’m not all that comfortable with the way the government and the Federal Reserve are handling things right now, that I just might sit out for the next month or so.
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Of course with me doing that, I just may miss out on some great moves, but when in doubt, sit it out.
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On Thursday the DOW lost 223 points. It started off bad in the morning and was pretty much steady all day until the end when the rest of it fell out. The whole week was trading on light volume, which makes it hard to really see which way the markets could have gone. It’s not easy to get a feel for the markets during a holiday week.
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I will wait until tuesday to get a feel for the market tread, but the way the markets have been lately, it’s doesn’t stay one way or the other for long. Take your time and do your research carefully, like you should do all the time.

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Nuclear Energy Stocks

billy — Thu, 02 Jul 2009 03:34:07 +0000

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There are many different stocks out there that fall under the term “speculative”, of course that not really the case when it comes to the electric utility stocks. I just want to write about a sector that seems to be building up steam (literally and figuratively) later that needs to be addressed.
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A little over a month ago I started looking for a new speculative stock to trade (oppose to invest in) and I happen to stumble over a company that is in the electric utility sector, but because it is mainly a nuclear play, I thought it would be a decent opportunity. I looked around at other companies that are also trying to expand their nuclear plant output, but this one stuck in my mind.
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I invested a small amount (like I always do on speculative stocks) in the company after reading their earnings reports and reading the transcripts from their conference calls. Since then the stock price has moved up over 30% in just 5 weeks.
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What really made me think that I had to write a post on it, was the fact that the company was profiled on a CNBC special this week titled Nuclear Option. In the show there was a lot of positive talk about the use of nuclear power being used in this country. There hasn’t been a nuclear power plant built in the United States in over thirty years, but now there are two being built as I type this post. One in Texas and the other in Maryland.
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The company that I’m referring to is NRG Energy Inc. (NYSE:NRG). The company looks good to me and I will be buying more of it on the dips. I do expect it to lose some value because of profit takers as well as the overall market taking it down some as the DOW and the economy take a roller-coaster ride throughout the remaining part of the year. The chart looks healthy and with the price of oil expected to go back up, it will continue to rise.
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As with any stock you look to invest in or trade, you need to do your own research to see if it’s right for you.
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Happy Trading.

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The Stock Market Is Getting Ready For Another Run Up

billy — Wed, 17 Jun 2009 14:48:40 +0000

Here we are again going through another correction in the markets. The three indicies have dropped over the past week off their seven month high and I’m not surprised. Over the last three months the markets have been on a tear coming off their lows. I mentioned before about how the markets wouldn’t be able to continue these gains without some sort of correction and profit taking.
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Even though I’ve been waiting for this pull back for some time, I did expect it. I will say that the markets aren’t as weak as I thought. I no longer expect to see the DOW reach 7000 again. As a matter of fact I don’t think it will get below 7800.
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The word on the street is that there is a large amount of money sitting on the sidelines waiting to jump back in, which means that once investors and traders feel that the waters a safe enough to come back in, it will help the markets rebound even more. Yesterday I heard that many of the hedge fund managers are already invested in and that they don’t have much capital not isn’t in the markets. The report stated that they are concerned that they may miss the next surge in the markets and they don’t want to be caught sitting it out.
If that’s the case, it can also be said that if they get skittish and pull their money out to avoid another big loss, we will see the 7800 level on the DOW.
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I don’t think so on the latter issue because the housing market is showing signs of stabilization, as well as the financial sector. Jim Cramer last night even had a segment in regards to the housing bottom. Since last August he has been saying that the housing bottom would be around June 30th of this year. Well, he ripped the board down and said that after yesterday’s housing number were the third straight month that they have improved. Other indicators are looking good too.
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With that in mind, I will start building positions in the stocks that I’ve been watching for sometime. Over the next two weeks, I will be looking at Apple, JP Morgan, Research In Motion and Agnico Eagle Mines. Of course there are others that I do like, but I would want more of a pull back before jumping on board with them.
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If you’re looking to take advantage of some free advice from Jim Cramer (besides his TV show), Check out his Action Alerts program that he’s always mentioning on his show. I’ve been a member for over a year and find some sound information from him, along with some great picks. Follow the link for a two week free trial of his Action Alerts subscription.
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