Author Archive: Jeff Reeves

The Vanguard Dividend Appreciation ETF (VIG) is the largest and most popular dividend ETF on Wall Street. It boasts an amazing $60 billion in assets under management, and holds about 300 of the largest dividend stocks.

And it yields a miserable 2.1%.

That’s because, like many index funds, VIG weights stocks by size. That means companies like $450 billion drugmaker Johnson & Johnson (JNJ) and $1.8 trillion Big Tech icon Microsoft Corporation (MSFT) alone represent about 7% of the portfolio – even though they pay relatively light yields of 2.5% and 1.1%, respectively.

The false promise of index funds like the Vanguard Dividend Appreciation ETF is that you can “set it and forget it.”… Read more

No investment portfolio moves up in a straight line. But in a fast-changing environment like this one, it is important for investors to do their best to limit volatility as much as they can by a focus on high-quality, low-risk stocks.

Too bad most investors are obsessed with chasing fads, though.

First, it was the outperformance of energy stocks in early 2022. Now it’s the resurgence of select biotech stocks that have snapped back 20% or 30% in just a few weeks. And undoubtedly, it will be something else with even more hype behind it by Christmastime.

The problem with fads is that you can almost never predict how long they will last, or what will come next.… Read more

In September, the S&P 500 logged its worst performance since 2002. And after further pain to start October, stocks touched on a two-year low.

Many investors are convinced that the worst will be over soon, and then they can get right back to the business of reaping 25% to 50% a year in Big Tech stocks the way they used to in the good ol’ days.

Fat chance.

The sheer volume of naïve investors out there, full of excuses and wide-eyed optimism about the market, is staggering.

They say the war in Ukraine that began last winter was a once-in-generation conflict, and it’s only a matter of time before Big Tech comes roaring back…

They shrug at 500-point declines in the Dow, pointing out that at least things aren’t as grim as they were during the financial crisis or the dot-com crash…

And when all else fails, they point out that, hey, at least we aren’t living through another Great Depression.… Read more

Dividends are one of the most important features of any investment in my portfolio. But it’s crucial to also examine the sustainability of a stock’s dividend before you invest your hard-earned cash.

For instance, a high-yield stock might offer a dividend of 10% … but who cares if its share price falls off a cliff, or it eliminates that once-generous dividend in the months ahead?

There are a ton of data points at our fingertips in a digital age that can help us invest wisely. But the sheer volume of facts and figures can be overwhelming, and obscure what really matters.… Read more

I’m admittedly a bit of a science geek. I’m glued to my phone for the latest details on the Artemis launch, I know the names of most muscles and bones, and I have memorized way too many strange facts about strange animals.

A scientifically minded approach has served me well in investing. And it’s not just in the obvious ways, through rigorous research and attention to hard numbers. The “softer” sciences of psychology and sociology also have a lot to teach us about investor behavior – and why some people make costly mistakes.

I recently read about a study conducted by Johns Hopkins researchers on the power of ignoring things.… Read more

It’s been a brutal year for tech stocks, and one of the hardest hit names in the sector has been Intel Corporation (INTC). And unfortunately, things seem to be getting worse lately – not better.

Case in point: Intel stock is down more than 40% year-to-date, with a decline of almost 20% coming in the last month or so after very disappointing Q2 results at the end of July.

By comparison, the Nasdaq composite is down “only” 26% on the year and 11% in the last 30 days.

With returns like this, there are really only two ways to view the chipmaker as it trades at the lowest levels since 2015… Either Intel is crazy cheap after these declines, or investors who are bargain hunting in INTC are just plain crazy.… Read more

Wall Street has been giving investors whiplash lately, as the big rebound from July evaporated in August. And as we look to close out the year, more volatility is sure to follow.

Most financial news channels blame the choppy environment on rising interest rates, rampant inflation or other macroeconomic boogeymen. But that’s just because the media needs to keep you clicking on headlines if they want to get paid! The real reason for recent volatility is much simpler.

It’s not really troublesome data points driving the market, but rather troublesome bouts of “first order” thinking.

Spend time around toddlers or pets and you’ll see the perils of first order thinking on display.… Read more

If you did any driving over the holiday weekend, you may have noticed that prices at the pump are much more manageable than they were just a few months ago. In fact, they recently hit their lowest level since mid-February.

That’s great for motorists, but has admittedly created plenty of pain for investors who thought the windfall profits in the oil patch were sustainable. Consider that the popular Energy Select Sector SPDR Fund (XLE) made up of blue chip energy stocks is down almost 15% from its June high, while the S&P 500 on average has managed to post a small gain in the same period.… Read more

Among the many lessons I learned in the aftermath of the 2008 financial crisis, one of the most important was to do my own research. You simply cannot get ahead by chasing whatever tickers are hot on CNBC and Twitter, or by taking the headlines in financial media for granted.

But I must admit, it’s not always comfortable to think like a contrarian and focus on long-term income over a short-term adrenaline rush. It sometimes means sitting on stocks that may seem to “underperform” the high-octane tech stocks everyone’s gushing about. And it sometimes means thinking differently about performance by looking at what’s important to you vs.… Read more

Thinking like a contrarian can sometimes be a crucial part of investing profitably. To be clear, that doesn’t mean you ignore reality. It just means that you’re willing to look beyond the obvious narratives based on the last few trading days, and instead look to what the future holds.

Right now, we’re at an interesting point in the stock market that lends itself to contrarian thinking. On one hand, the last several months have all given us ample proof of the risks on Wall Street – inflation, rising rates and volatility. But looking forward, the narrative may be changing.

July Inflation was flat month-over-month as measured by the Consumer Price Index.… Read more