Sector and Business Cycle Investing. 95% who voted found this helpful Over the intermediate term, asset performance is often driven largely by cyclical factors tied to the state of the economy, such as corporate earnings, interest rates, and inflation. The business cycle, which encompasses the cyclical fluctuations in an economy over many months or a few years, can therefore be a critical determinant of equity market returns and the performance of equity sectors. This paper demonstrates Fidelity’s business cycle approach to sector investing, and how it potentially can generate positive, active returns over an intermediate time horizon.
Asset allocation framework Fidelity’s Asset Allocation Research Team (AART) conducts economic, fundamental, and quantitative research to produce asset allocation recommendations for Fidelity’s portfolio managers and investment teams. Understanding business cycle phases Every business cycle is different in its own way, but certain patterns have tended to repeat themselves over time. Learn more. Seekingalpha. Introduction For those of you who have followed this series, I have been providing updates on my portfolio each month or two. For the most part, the updates are boring. I will tell you about the raises in the dividends I collect. I also tell you about the reinvestment of those dividends. Rarely do I really tell you about large sweeping changes. Well, thanks to Trump Bump I finally had my chance to make some big changes in the portfolio. As a recap, this portfolio exists as a traditional IRA that was created as a roll over from a 401k when I left a job a few years back.
For this months update, I am going to share how I went from 24 holdings down to 17. Portfolio Overview Funded with a 401k rollover Retirement timeline is roughly 27 years Goal is to earn a 3% yield with a 5% dividend growth My target is to have $1M in the portfolio in 2043. Holdings Note: Price is based on market price as of market close on 11/23/16. November Sales Oh man, this is the section we have all been waiting for. Can-stocks-lose-over-a-10-year-holding-period. In this segment from Motley Fool Answers, the cast talks about a few "that will never happen" moments in the world of economics and finance that -- surprise! -- actually happened. In this case, they tackle an idea that lies at the heart of Foolish investing: a long-term outlook. But as you will see, even a full decade has at times been insufficient during some of the worst downturns in history.
A transcript follows the video. 10 stocks we like better than Apple When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market. David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Apple wasn't one of them! Click here to learn about these picks! *Stock Advisor returns as of October 3, 2016 The author(s) may have a position in any stocks mentioned. This video was recorded on Nov. 1, 2016. Brokamp: Right. Buffett's best measure of valuation is flashing danger for stocks. (Source: AdvisorPerspectives.com) Buffett admits that the ratio has "certain limitations in telling you what you need to know.
" One such limitation could be the effect of overseas business operations on both market capitalization and GNP figures. First, GNP represents the total value of products, services and people within a country's boundaries, whether by domestic or foreign businesses. Second, market value is a combination of both domestic and international businesses. Differences in financial reporting, accounting rules, regulations, customs and tax laws create potential complications with respect to available data. More from ETF Strategist:Time for investors to get off the couch and grab this key tax breakYield chasers, don't blame TrumpMillionaires' best markets advice to investors right now Here is a limitation Buffett did not mention but is important to our analysis. If the ratio gets too high, Buffett says you're "playing with fire. " Dividend ETFs: The 5 Best Ways to Collect Income. It’s a strange time to be an income investor.
Most government bonds in the developed world actually sport negative yields. And even those in positive territory — like U.S. Treasuries — don’t yield enough to make them worth considering. But more fundamentally, bonds — even in a normal rate environment — aren’t really your best option as a long-term income vehicle. Bonds are tax-inefficient, as all of your income returns are taxed as current income at your marginal tax rate. A better option for long-term investors would be a good portfolio of dividend stocks. Dividends are generally taxed at a more favorable rate than bond interest, plus — and this is the biggest selling point — healthy companies tend to raise their dividends over time. Of course, the easiest way to get exposure to a diversified portfolio of dividend stocks is to buy a dividend ETF or a handful of dividend ETFs.
The 10 Best ETFs on the Planet Next Page Best Dividend ETFs: iShares Select Dividend ETF (DVY) Expenses: 0.39% Seekingalpha. Eaton Vance Option Equity Closed End Funds: An Update A year ago I published an article on the Eaton Vance Option-Income closed-end funds (Comparing The Option-Income CEFs From Eaton Vance). These are equity funds that generate high levels of income primarily from option-writing strategies.
They are among the best choices for equity CEFs and are among the most followed on Seeking Alpha. I thought it would be timely to do an update. The Funds There are eight funds in this group. Covered Call Funds. Eaton Vance Enhanced Equity Income Fund (NYSE: EOI) Eaton Vance Enhanced Equity Income Fund II (NYSE: EOS) Buy-Write Funds. Eaton Vance Tax-Managed Buy-Write Income Fund (NYSE: ETB) Eaton Vance Tax-Managed Buy-Write Opportunities Fund (NYSE: ETV) Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (NYSE: ETW) Diversified Equity Income Funds. Eaton Vance Tax-Managed Diversified Equity Income Fund (NYSE: ETY) Eaton Vance Tax-Managed Global Diversified Equity Income Fun (NYSE: EXG) Returns.
The trouble with value is the trouble with agents: James Saft. ‘Dividend Aristocrat’ stocks post almost double the returns of the S&P 500 in 2016. Boards of directors that consistently reward investors with higher dividends don’t get enough praise. While Amazon AMZN, +0.24% Oracle ORCL, +0.22% and Facebook FB, +0.27% are lauded for their genius-level CEOs and innovative business models, companies that keep raising dividend payouts year after year really enrich investors in the long run, and can be excellent performers within a diversified portfolio. U.S. companies that have raised their regular dividends on common shares for at least 25 years are included in the S&P 500 Dividend Aristocrats Index SPDAUDP, +0.47% It doesn’t matter how high a stock’s current yield is, just that the dividend continues to rise.
Beloved Aristocrats include real estate investor HCP Inc. HCP, +0.72% soft-drink giant Coca-Cola Co. So even though investors tend to think of dividend stocks as vehicles for income, the Aristocrats have been a fantastic vehicle for growth. Here’s a five-year comparison in chart form: FactSet Here’s a 10-year comparison: 15 years: Seekingalpha. Apple Inc. (NASDAQ:AAPL) will be reporting its quarterly earnings for the quarter ending June 2016 on Tuesday July 26 after the market closes. Consensus estimates are calling for $1.38/share for net earnings, and $42.11 billion for revenues. Last quarter, Apple missed consensus estimates for net earnings by 10 cents, reporting net earnings of $1.90/share vs. consensus estimates of $2.00/share, and revenues of $50.56 billion vs. consensus estimates of $51.87 billion. In the 30-day period (4/13/2016 to 5/12/2016) straddling last quarter's earnings release date (4/26/2016), Apple shares traded between 112.30 (intraday high on 4/15/2016) and 89.47 (intraday low on 5/12/2016).
That's a sizable range of 23 dollars, while currently Apple shares last closed at 98.66 on 7/22/2016. Click to enlarge Apple stock 6-month chart - Source: Yahoo Finance Apple Earnings Surprises Apple earnings estimates vs. actual - Source: Zacks Apple stock price vs. quarterly earnings surprise - Source: Y-Charts Conclusion. Better-buy-cisco-systems-vs-oracle. As Cisco (NASDAQ:CSCO) CEO Chuck Robbins continues to transform that company into a cloud-driven, Internet of Things (IoT), software powerhouse, he's putting it directly in the path of longtime enterprise hardware rival Oracle (NYSE:ORCL).
Just glancing at one of Oracle's earnings releases, or listening to one of its quarterly conference calls, will make it abundantly clear that it, too, has plans to ramp up its cloud-based revenue. Similarities aside, Cisco and Oracle are approaching their respective transformations in slightly different ways. Robbins has Cisco focused on continuing to build its recurring revenue model by emphasizing its subscription offerings. Oracle's cloud patform-as-a-service (PaaS) and software-as-a-service (SaaS) sales have boosted its ongoing revenue too, but that's more of an afterthought for co-founder and CTO Larry Ellison and team. So which is the better buy? Image source: Cisco. The case for Cisco Image source: Oracle.
The case for Oracle. 180 Years of Market Drawdowns. “We tend to be inadequate historians.” – Robert Frey A couple weeks ago I covered a little discussed topic involving the the use of historical market data. Namely that you have to take market returns that go back to the turn of the 20th century with a grain of salt because of the fact that costs were much higher in those days so no one was really receiving those gross returns on a net basis.
The natural follow-up question to this line of thinking would be — so what does stock market data going back to the 1800s really tell us? A reader sent me a link to a video of a presentation given by former hedge fund manager and quant Robert Frey (whose firm was actually bought out by legendary hedge fund manager Jim Simons in the 90s) called 180 Years of Market Drawdowns. But there has been one constant going back all the way to the early 1800s — risk. More specifically, drawdowns or losses. Looks pretty good to me. Frey says in his talk that in stocks, “You’re usually in a drawdown state.” Don't know where U.S. stocks are headed? The options market has a deal for you. Is This The Next Big Headache For Oil Prices?
When oil analysts look at the markets to try to get a sense of where oil prices are heading, one of the great unknowns, at least in the U.S. shale industry, is the large volume of drilled but uncompleted wells (DUCs). As oil prices began collapsing two years ago, shale drillers increasingly decided to defer the completion of their drilled wells, hoping to wait out the downturn and bring production online at a later point when prices rebounded. But with oil prices suffering from a prolonged downturn, the DUCS began to mount, leaving a huge backlog of potential production that was yet to come online. From the point of view of the nascent and fragile oil price recovery (or more accurately, several cycles of recovery in the past year or so), the DUCs threatened to kill off the price rally, as they would bring a flood of new production online right when prices rose high enough. However, it appears that the “fracklog” is already getting worked through. Other forecasters are more skeptical.
Why lithium will see another price spike this fall. So far, lithium has been the hottest metal of 2016, beating out gold, with exponential demand expected over the coming years. Although the price trajectory of the metal has been subdued in recent months, the fundamentals behind the long-term trajectory suggest strong potential for long-term growth.
Price doubling from 2014/2015 was first seen in China and is now being felt worldwide, with lithium hydroxide prices from $16-20 and carbonate prices from $12-14 thousand USD per ton. Automotive thrust There is no doubt as to the push that Tesla has given the current automotive transition to electric vehicles (EVs). As the company’s mission statement outlines, it hopes “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.” However, since 2014, when Tesla first announced the Gigafactory with Panasonic, other manufacturers have begun to take notice and take action. Electrical grid connections Demand response: A wild ride.