Free Investing

Richard Shaw (QVM Group) submits: MLPs have generated higher yields than bonds or stocks over the past ten years, but have exhibited higher volatility than bonds, more like the volatility of stocks (see Part 2). However, the correlation of returns between stocks and MLPs over the past several years is only moderate, making them more useful in an asset allocation / rebalancing program than some other securities with higher correlation to stocks. As stocks and bonds have tended to have a negative correlation in recent years, MLPs and bonds have also had negative correlation. This table of correlations between stocks (represented the S&P 500 index fund, VFINX), bonds (represented by the Barclay's Aggregate Bond index fund, VBMFX), and the ten largest MLP's in the Alerian MLP index, shows the correlation for 1 year, 3 years, and from the stock market peak to trough (10/2007 to 03/2009), and from the stock market trough to now (03/2009 to 07/2010). In each case the correlation between stocks and MLPs is only moderate, and the correlation between bonds and MLPs is negative, as it is between stocks and bonds.Complete Story »

Low Sweat Investing submits:I’m a real geek for asset class diversification. The way I figure, something’s bound to go wrong and something’s bound to go right, but I have no idea what or when. So, I diversify away from risk, and toward income and returns. I mean risk, such as crashes, panics, inflation, deflation, recession and income that doesn’t require selling depressed assets. With positive returns from at least something, whether morning dawns, happy blue, or doomsday gray.Complete Story »

Kapitall submits:Here is a list of 15 companies releasing earnings on July 26. We've sorted the companies by market cap, and have briefly discussed their earnings performance over the past 3 years.The charts show past earning performances against analyst estimates. The green markers indicate the company beating estimates, while the red makers represent the company falling short of analyst expectations. All data is sourced from Zacks Investment Research.Complete Story »

Market Folly submits:Market strategist Jeff Saut is out with his latest investment commentary entitled, "Don't bet the farm." In it, he lays out some basic risk management principles. The first of which, obviously, is to not bet the proverbial farm on any one scenario, no matter how good it looks. Managing downside risk is the key to success in markets. Louis Bacon, famed hedge fund manager at Moore Capital, will be the first to tell you that. Saut also believes that portfolio rebalancing is one of the tenets of successful investing. This whole conversation is an extension of his commentary last week where proclaimed risk adjusted stock selection is a key to portfolio success. You can read his entire investment strategy for the rest of his thoughts on risk management but we wanted to touch on his latest market thoughts as well. Saut highlights an excerpt from Lowry's Selling Pressure Index, who writes,Complete Story »

Kapitall submits:The following is a list of stocks in an uptrend that are seeing insider and institutional buying. The parameters for the screen:

• All companies have a market cap above $300M
• All companies have inside ownership of more than 10%
• All companies have seen insiders and institutional investors increasing holdings over the last 3 months
• All of these stock are trending upward, trading above the 20 day, 50 day, and 200 day moving averages

Here is an interactive chart of all the companies in the screen. A more detailed analysis of each stock follows below. Complete Story »

Dividends4Life submits: Have you ever pondered the concept of forever or infinity? It is truly mind boggling! What is even more astonishing is that when I buy a stock, my target holding period is forever. For most people, myself included, that is hard to grasp and to carry out. When things start going bad, our primal instinct of flight kicks in and we want to sell. In many cases, that is the time we should be buying. Holding a stock through an economic downturn is much easier when it pays a rising dividend. Complete Story »

Avi Morris submits:Last week Constellation Energy (CEP) reported 2009 earnings. As expected, results were glum. Their focus was on consolidation, and paying down borrowings, which resulted in a 10% cutback in fixed assets.So far this year, that trend has continued, as CEP has reduced their debt by an additional $5 million. The distribution was suspended and a distribution in 2010 has essentially been ruled out.Complete Story »

Gary Gordon submits: The volatility in the stock market rattles your nerves. And who can blame you… when the possibility of 50% price declines may be un-”bear”-able. On the flip side, the bond market may have less going for it today than it has in many decades. For one thing, the current yield of a 10-year treasury is less than the dividends of utility stocks. SPDR Select Utilities (XLU) should arguably outperform 3.75% annualized over a decade. Moreover, with the Fed looking to remove stimulus — albeit slowly — rising interest rates kill the total return for holders of investment grade bond funds.Complete Story »

Joseph L. Shaefer submits: Oil, natural gas, and coal are anything but fossils. Mother Nature was kind enough to compress various forms of carbon over centuries, millennia and eons into giant batteries called “formations” for our use. Their age may make them fossil fuels, but their usability and cost make them future fuels. One day, alternative energy sources like wind, which we’ve used for hundreds of years, and solar, which we’ve used for thousands of years, may be focused and collected and priced to be competitive with oil, gas, and coal. But for the immediate future, any “subsidies” fossil fuel extraction companies realize in the form of depletion allowances, accelerated depreciation, etc. are more than offset by the massive taxes at the federal and state level that is levied upon their finished products – unlike alternative energy sources.Complete Story »

Dividends4Life submits: Investing in dividend stocks provides the investor with continuous feedback. As time passes dividend investors see their income steadily grow. You do not have to wait five to ten years to determine if the strategy is working. Each dividend and dividend increase provides the investor with reassurance that the strategy is working.Complete Story »