The Importance of Dividends for the Long Term Investor

Dividend producing stocks are attractive and offer investors compelling values (subscription required) according to this AAII Journal article by John Buckingham, director of research and chief portfolio manager of AFAM Capital and editor of the Prudent Speculator newsletter. Keep in mind, the article was written in mid-2015, but many of the statistics in the article are long term in nature and we believe investors seeking and investing in high dividend paying stocks should take note… Read More

Bond Market Volatility Likely to Continue in 2016

Short and long-dated Treasuries have nearly identical returns this year, with Barclays indices showing 0.71% returns for 1-3 year Treasuries and 0.68% returns on the 20-year-plus index. Expectations that the Fed will make successive rate hikes may favor long-dated Treasuries, however. Rick Rieder of Blackrock says such successive increases “will benefit the long end (versus) the short end”, so “the long end is the better part of the curve.” He said gradual rate increases will… Read More

Dollar Could Weaken Even As Fed Embarks on Rate Hiking Cycle

The rationale for predictions of continuing strength in the dollar are well-known but may be wrong, writes Ben Levisohn for Barron’s. Fundstrat strategist Thomas Lee looked at the last 11 tightening cycles (when the Fed began raising rates) and found that five involved “divergence” from European central banks (meaning that they were easing), which lasted a median of 17 months. During such times, according to Lee, the dollar has typically weakened a median 6.6% during… Read More

Low Rates Could Remain Stubbornly Low for Longer than Most Think

The Fed’s decision to raise short-term interest rates does not necessarily signal the beginning of a return to pre-2007 rates (averaging 7.3% from 1970-2007), writes Neil Irwin, Senior Economics Correspondent with the New York Times. Despite widespread predictions of sharply rising rates, Irwin notes that “interest rates historically are most closely tied to inflation.” Not only is the inflation rate currently very low, but most signs suggest it is likely to stay that way for… Read More

Low Rates Could Remain Stubbornly Low for Longer than Most Think

The Fed’s decision to raise short-term interest rates does not necessarily signal the beginning of a return to pre-2007 rates (averaging 7.3% from 1970-2007), writes Neil Irwin, Senior Economics Correspondent with the New York Times. Despite widespread predictions of sharply rising rates, Irwin notes that “interest rates historically are most closely tied to inflation.” Not only is the inflation rate currently very low, but most signs suggest it is likely to stay that way for… Read More

Cooperman Reiterates Positive Market Outlook. Says Oil in “Bottoming Zone”

Leon Cooperman of Omega Advisors lists a host of reasons why he remains optimistic about the market, telling CNBC that this bull market is not yet over. First on this list is that if a bear market were to begin today, it would be the first bull market to end without the Federal Reserve actually tightening interest rates. In the eight market cycles since the mid-1950s, stocks, on average, have gone on to produce gains for… Read More

Cooperman Reiterates Positive Market Outlook. Says Oil in "Bottoming Zone"

Leon Cooperman of Omega Advisors lists a host of reasons why he remains optimistic about the market, telling CNBC that this bull market is not yet over. First on this list is that if a bear market were to begin today, it would be the first bull market to end without the Federal Reserve actually tightening interest rates. In the eight market cycles since the mid-1950s, stocks, on average, have gone on to produce gains for… Read More

Dalio Sees Significant QE Before Significant Rate Hike

Hedge fund guru Ray Dalio says he expects the Federal Reserve to make a significant quantitative easing move before it makes a significant interest rate hike. “To be clear, we are not saying that we don’t believe that there will be a tightening before there is an easing,” Dalio writes in a recent post on his LinkedIn page (h/t MarketWatch). “We are saying that we believe that there will be a big easing before a… Read More