Articles

A prudent investor takes advantage of market dips. He buys oversold assets when the market panics—and stays the course during recoveries.

Unfortunately, prudent investors looking to add to their portfolios now can’t capitalize on a panicking market. This year saw two great buying opportunities: first in February when the market freaked out over global economic growth, and then again in July when Britain voted to leave the European Union. The Brexit vote only delivered a 4-day window to buy at a discount, and even then the sale was paltry—from peak to trough, the S&P 500 only fell about 5.3%:

Quick Dip, Limited Buying Opportunities

To buy this market during the downturn, you would’ve needed to act fast—and at the time many hesitated to buy in because they feared Brexit was a global catastrophe.… Read more

A few months back, I advised you to stick to your guns and avoid the temptation to “sell in May and go away.”

I hope you followed that advice, because it looks like investors who were duped by this tired old slogan are going to miss out on gains. Here’s how the SPDR S&P 500 ETF (SPY) has performed since May 1:

Now the herd is wringing its hands over the presidential election, worried that the fallout from the circus-like race will trigger a lasting market downturn.

But recent history says they’re off base here, too. Because once the vote is over, markets typically gain ground in the first year of a new presidential term.… Read more

REITs have been on a wild ride in 2016. With some names up over 50% year-to-date just a few months ago, the recent correction has come as a bit of a shock. Some REITs have fallen by 10% in the past month, and more declines are feared for many names.

In this situation, investing in REITs requires care and selectivity. We can’t just buy any REIT, or the Vanguard REIT Index Fund (VNQ), because we may be buying overpriced stocks that are destined to fall further. On the other hand, we want to get into this sector now – before the global manhunt for dividends sends these prices soaring.… Read more

Dividend growth stocks deserve a place in your portfolio, no matter how modest the allocation, simply because they often return 100% to 200% or better relatively quickly as their payouts rise.

You’ve probably noticed you rarely see your favorite stock paying more than 2% or 3%, even if the company raises its dividend every year. That’s because its price gets bid up as its payout rises – so you never quite get the bargain 4% yield you’re always waiting for, unless something really bad happens (like 2008).

Take industrial firm 3M (MMM), which boosted its dividend by 141% over the past decade for 170% total returns:

3M’s Dividend Growth Drives 170% Returns

Yet aside from the financial crisis, you never had a chance to buy the stock at a yield above 3%.… Read more

The REIT market has been on a tear in 2016. From the start of the year to October 1, the SPDR Dow Jones REIT ETF (RWR) gained over 6% while heavy-hitters like the Realty Income Trust (O) and Digital Realty Trust (DLR) rose more than 28%.

Now we’re in the midst of a REIT correction, and it’s hitting the best-performing REITs the most. That’s to be expected—after so many months of relentless strength, these names need to come back to Earth. And now it’s happening – just look at this chart:

What Comes Up Must Come Down—But How Far Down?

After months of massively outperforming the market, both O and DLR are now falling fast.… Read more

Looking for consistent, double-digit dividend hikes?

Bad news: your job is getting harder.

According to S&P Dow Jones Indices, US companies collectively increased their dividends by $6.0 billion in the third quarter (net of cancellations).

Sounds great, right? Too bad that number has plunged from the $7.3 billion in hikes announced in the second quarter—not to mention the $10.0 billion of increases rolled out in the third quarter of 2015.

The bottom line? Dividend growth is slowing—and faster than most investors think.

Worse, your odds of getting whacked by a surprise dividend cut are on the rise: the number of companies slashing their payouts hit 667 in the 12 months ended September 30, up 55.5% from the previous 12-month period.… Read more