Is IBM a Good Long Term Investment?
IBM just used part of its cash hoard plus a lot of debt to buy Red Hat which is a Linux software and cloud computing company. The purchase comes on the heels of a weak quarterly report due to soft software and server sales. And, news of the purchase drove the stock a bit lower. We have ask, is IBM a good long term investment?
International Business Machines
IBM has been around since 1911 and took the name International Business Machines in 1924. The company has been a dominant presence in the world of computing and basic research for decades. Over that […]
Should You Invest in the FANG on the Correction?
The long-running bull market is starting to correct. We, and many others, have suggested that investors may want to get out of growth stocks and switch to value stocks in preparation for a market crash or at least a painful correction. The rationale is that value stocks are companies with low debt, cash in the bank, and property unencumbered by excessive debt. However, the basis of intrinsic stock value is forward looking earnings. And, the best earnings in recent years have come from tech stocks like the FANG (Facebook, Amazon, Netflix, and Google-Alphabet).
Protected from a Trade War with China
One of […]
Defense Stocks for a New Nuclear Era
The USA is about to exit a Reagan Era nuclear weapons treaty with the Russians. This could set off another arms race in weapons of mass destruction. It could also provide profitable investments for defense stocks in a new nuclear era. Zacks suggests two defense stocks to buy if we end up in another nuclear arms race with the Russians and Chinese.
President Donald Trump has decided to withdraw the United States from the landmark nuclear weapons deal signed with Russia in 1987 that banned both nations from owning, producing and test-flying nuclear missiles.
While Trump’s recent decision may not be a […]
How to Minimize Your Investment Losses in the Next Recession
The current volatility in the US stock market is reminiscent of the days preceding both the dot com crash and the 2008 market crash that ushered in the Great Recession. It may well be time to consider how to minimize your investment losses in the next recession. The 2008 crash destroyed about $7 trillion in equity value. A crash today might destroy as much as $20 trillion in equity value according to Investopedia.
The recent stock market retreat, which has sent the S&P 500 Index (SPX) down by 5.9% from its intraday high on Oct. 3, has intensified the debate between […]
How Will the Election Affect Your Investments?
The mid-term elections are almost upon us. It is almost a certainty that there will be a substantial shift in the balance of power in congress. Although smart investors keep their politics and their investment strategies separate, it is still a good idea to consider how the election will affect your investments. In this regard, Forbes has some thoughts about the risk to stocks from the mid-term election.
We currently think there is only one scenario that has a reasonable probability of happening, looking at current political polling. (Yes, we get that polls are flawed but, in the aggregate, they do […]
Which of Your Investments Will Suffer as Interest Rates Go Up?
The US Federal Reserve has raised interest rates again. And, more rate increases are in the cards for December of 2018 and into 2019. Which of your investments will prosper and which of your investments will suffer as interest rates go up? CNBC weights in on this question with an article about the best performing stocks in the Dow as interest rates go up.
While stocks like J.P. Morgan, Goldman Sachs and Visa do well when rates are surging, Walmart and Coca-Cola struggle.
Walmart averages a loss of 0.8 percent when rates rise 25 basis points or more in one month, the […]
Do Your Investments Have Pricing Power?
A trade war is becoming more certain and the effects of the Trump tax cut are wearing off. Which of your investments will retain their value and which will correct? Earnings have been the driver in this bull market. But, which stocks will continue to display strong earnings in a full-fledged trade war? Companies that dominate their market niche are typically able to raise prices without losing many customers. This is pricing power. Do your investments have pricing power?
CNBC writes about stocks to buy to ride out a trade war with China.
Goldman Sachs says there is still an investment strategy […]
How to Spot Overpriced Investments
The S&P 500 has been on a steady upward climb for the last nine and a half years. As the market climbs higher and higher the smart investor needs to know how to spot overpriced investments. Ideally, one has bought low at the beginning of the bull market and can sell high before the market or individual stocks correct. The S&P 500 index is four times greater than it was in February of 2009. However, this year the vast majority of gains within the S&P 500 group have come from a handful of well-known tech stocks. CNBC noted that just […]
Simple Steps to Successful Investing
There are many times in life when the “KISS” approach is the best. (KISS = keep it simple, stupid!) Successful investing is one of them. The vast majority of investors have a “day job.” That is to say, they work at something other than managing their investment portfolio. That means that most of us need to follow a few simple steps to successful investing.
Simple Steps to Successful Investing
Take advantage of 401K’s, IRAs, and other tax deferred investment vehicles
Invest in your home
Pay off credit card debt before any other significant investing
Keep your investment vehicles simple
IRA’s and 401 K’s
An IRA is an […]