With events in the Middle East and Africa boosting oil prices, some economic watchers are beginning to talk about the possibility of stagflation: a period in which both inflation and unemployment are high. Like the 1970s in the U.S., the time of “malaise,” lines at the gas pump, and strong performance of dividend stocks. According to John Schloegel, portfolio manager at CORDA Investment Management, during the stagflation of the 1970s, 70% of the total stock market return for the decade came from dividends, only 30% from price appreciation. Even without that bad brew, dividends pack a punch, he says: Over the longer run 40-45% of total stock returns can be attributed to dividends. Continue reading
A few weeks ago, Mel Lindauer expressed his worry that the super-low yields offered by bonds these days have people considering questionable move: switching money out of bonds and into dividend-bearing stocks in a search of more income. “People look around and there’s nowhere to turn,” said Lindauer of the fixed income market. “I’m really concerned. I’m concerned that people are talking about possibly going into equities to get the 2.5% yield and forgetting about the risks in equities.”
Larry Swedroe added his voice to the chorus of concern in his MarketWatch column last week. High-dividend stock strategies “are poor substitutes for either a high-quality bond approach or [a] diversified stock approach,” Swedroe writes, Continue reading
This is a guest blog by Mycroft Psaras. It’s an edited version of a longer piece that can be found at The Free Cash Flow Analyst.
The internet is obviously an evolving and changing civilization with millions of new websites being created every day. As an investor though I have never been able to capitalize on Internet stocks in large numbers, because they have never been able to provide the price to free cash flow numbers that I look for when making an investment. Continue reading
After a recent post about the debated idea of trying to time the market, I had a conversation with Hamamjian, who runs an investment advisory firm called GeaSphere.
Hamamjian argued for market timing — but not in isolation. When combined with portfolio diversification and smart stock picking, he says it is the best way to get market-beating numbers.
Smart stock picking is no easy order, but his criteria are not that complicated. Continue reading