Finance professor Jeremy Siegel still expects the Dow to hit 18,000. But he's concerned about the labor force and commodity prices.
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Fund investors seeking exposure to gold should consider holding a mix of bullion -- via an ETF -- and mutual funds that invest in gold miners.
By Stan Luxenberg, TheStreet
So far this year, gold prices have climbed 14% to $1,662, while precious metals funds have dropped 15.7%, according to Morningstar.
The performance is unusual because most often the funds rise along with bullion prices. Fund portfolio managers offer several theories about what has caused the poor returns.
Utilities funds were among the only gainers as the stock market rout gathered steam. Here are 5 utility stocks that led the sector.
By Frank Byrt, TheStreet
U.S. stock mutual funds that invest in a diverse array of companies turned in a shameful performance last quarter, as none -- that's right, none -- made money.
Among funds that buy mainly U.S. stocks and use no leverage or short positions, only three sector-specific funds eked out gains from the beginning of July to the end of September, according to research firm Morningstar: Icon Telecommunications & Utilities (ICTUX), up 1.9%; Franklin Utilities (FKUTX), up 1.7%; and Invesco Utilities Investor (FSTUX), up 0.3%.
The stock market rout gathered steam last month on concerns that the U.S. economy is slipping into another recession and Europe's debt burden will sink more banks and lead to a further decline in global corporate profits. In September, materials stocks fell the most, by 13%, followed by energy at 10% and financial services at 8.3%, according to Capital IQ. Utilities shares were the sole sector to rise, by 1%.
Investors should look for defensive trades in this shaky market. Funds tracking China and silver could be due for more wild swings.
By Don Dion, TheStreet
Here are five exchange-traded funds to watch this week.
In the second week of October, Alcoa (AA) will provide what many market watchers consider the bellwether earnings report of the season. However, in the days leading up to this event, there will a handful of companies representing the industrials and agricultural sector that will report ahead of the aluminum giant.
For instance, Monsanto (MON), an agricultural powerhouse, will report its quarterly earnings along with its outlook on Wednesday. ETF investors looking to target this firm should turn to the equity-backed MOO.
Designed to provide investors with exposure to the largest and most recognizable companies in the global agriculture industry, MOO sets aside ample exposure to companies like Mosaic (MOS), Deere (DE) and Potash of Saskatchewan (POT). Monsanto is the fund's largest position, accounting for 8% of its portfolio.
High volatility and downside risk mean caution is warranted in advance of potential buying opportunities.
By Tom Aspray, MoneyShow.com
September was a rough month in the markets, and the wave of selling last Friday did not help. The S&P 500 was down 7.2% in September and 14.3% for the quarter. For the year, the Dow Transports are down almost 18%, which looks pretty good when compared to the KBW Bank Index, which has lost 32.3%.
Commodity traders were also hit, as a surprising crop report pushed corn and wheat limit down in Friday’s session. Even gold was not immune, as the SPDR Gold Trust (GLD) lost 11% in September, though it is still up close to 14% for the year.
Electronics resellers are seeing a surge of activity in anticipation of Tuesday's launch.
By Olivia Oran, TheStreet
The student and part-time AT&T (T) employee from Sacramento, Calif., had traded in his iPhone 4 to an online reseller called Gazelle, which offered him $300. He plans to use the funds to purchase Apple's fifth generation smartphone after its launch on Oct. 4.
"I'm an Apple nerd," Zwolinski said. "I deal with phones all day every day and constantly see problems with other phones, but not the iPhone."
Companies like Caterpillar and Honeywell have yet to see a slowdown in demand, yet their stocks are like hot potatoes that no one wants to hold on to.
Here's a piece I don't want to write. Industrials seem determined to replay 2008. It doesn't matter that things are much better for them. It doesn't matter that there is ample credit around the world, something that crushed them the last time around.
It doesn't even matter that none, not one, of the industrial stocks I am close to -- Honeywell (HON), United Technologies (UTX), Cummins (CMI) or Caterpillar (CAT) -- have seen a slowdown. They all get whacked.
This endless decline is playing havoc with the performance of anyone who is trying to keep pace with the averages. Owning them has been anathema to making money.
In anticipation of the warehouse store's earnings, it's worth noting there's much more to its stock than low prices.
Costco (COST) is America's largest wholesaler by revenue and is watched closely by investors and consumers alike as a sign of how the economy is doing in general. If folks flock to Costco for deals in bulk, it's probably not good news for most family budgets. If Americans spend more on name-brand and upscale products instead of the no-frills items at Costco, it's a sign consumers have more money to burn.
Here are three reasons Costco is beating Wal-Mart:
A disturbing retail report and a jump in inflation in Europe led to renewed fears for investors Friday.
One major movie studio has said it will stop footing the bill for 3-D glasses next year. So who picks up the cost?
Sony Pictures Entertainment has said it will stop paying for 3-D glasses by next May, and other studios are likely considering the same thing, according to The Hollywood Reporter. It can cost a studio as much as $10 million to provide 3-D glasses for each blockbuster movie.
So who's going to pay for those glasses now? The burden shifts to theater owners, and they're not happy about it at all. Regal Entertainment (RGC), which saw its stock price drop more than 8% this week, warned studios this week that it may show fewer 3-D films as a result.
Here's why gold and silver prices are falling, and why there's reason to believe they will rise again.
By John Browne, TheStreet
Fall officially began on Sept. 23, but it's not just leaves that are cascading downward. In the few market days of the new season, precious metals prices have seen significant drops, some 11% for gold and 31% for silver. In its lurch downward, gold plowed through support levels at $1,750, $1,700 and $1,645 an ounce. I'm sure many readers are concerned.
After all, by the time gold put in its recent peak on Aug. 22, it had logged a stunning 44% appreciation in calendar year 2011. And even after its recent tumble, the metal is still 22% higher than it was on Jan. 27, the 2011 low. Therefore, some may conclude that gold has further to fall, and that the descent could be steep.
Given this anxiety, it might be helpful to summarize some factors we see impacting prices. Emotions loom large in the financial world, and it is easy to lose one's focus during periods of uncertainty. From as rational a perspective as I can gain during these irrational times, here is my view on why precious metals have recently pulled back so violently:
Investors of dividend-generating securities need to acknowledge the fact that dividends can and do experience declines.
By Ron Rowland, TheStreet
There is a raging debate regarding the best way to live off your portfolio. Young adults are told, by those older and wiser, to save and invest for retirement. There is never a shortage of ideas and suggestions on how to build a nest egg. For those lucky enough to have accumulated a nest egg large enough to meet their financial needs, the dilemma is determining the best way to tap that egg.
When it comes to defining the best solution for this task, there are two major camps -- and they rarely see eye-to-eye. In one corner are the total return proponents. They believe the optimum approach is to manage the portfolio for total return. They assume the income generated by the portfolio will not be sufficient to cover retirees' annual financial needs and therefore some holdings will need to be sold to make up the shortfall.
In the other corner is the dividend income camp. That camp believes the optimum approach is to invest strictly in dividend-generating securities that kick out the required income without ever having to sell any holdings. The dividend camp makes some compelling arguments, but that is a subject for another article.
Meet your enemy, shareholders.
By Morgan Housel
"HP's Board of Directors Is Pathetic."
That was the headline floating around last week. It's hard to disagree. Hewlett-Packard's (HPQ) board is getting good at two things: tripping over their own incompetence and handing out dynastic pay packages.
It started last year when HP's board pushed out then-CEO Mark Hurd for allegedly abusing $20,000 worth of corporate expenses. For his misdeeds, Hurd was shown the door with a $35 million severance package, and quickly took up an executive position at rival Oracle (ORCL). Some claim the board's hands were tied with the severance package, and that it was contractually obligated to make the payout. Blarney. As Nell Minow of the Corporate Library pointed out, by letting Hurd resign, rather than firing him, the golden parachute was entirely voluntary.
Evidence builds that a major market turnaround is nearing as economic fundamentals improve and technical indicators reach extremes.
As the third quarter ends, it's been a terrible few months for stocks and other risky assets. Since early July, the S&P 500 has lost more than 15%. The small caps in the Russell 2000 have been hit even harder, down nearly 24%. Industrial commodities like copper have been hit, too: The iPath Copper (JJC) is down 31%. Even gold, a perennial favorite of the doom mongers, has lost 16% in just the past few weeks.
All of this has been driven by a massive markdown in economic growth expectations, something I warned of as far back as late April, just days ahead of the market's topping out. In "Investors, it's time to run and hide" I discussed how negative catalysts like Japanese supply chain woes, new concerns in Europe and rising inflationary pressures were about to pop the bubble in bullishness as the economy started to sag.
Demonstrators in New York and San Francisco rail against power, money and influence.
The protests have gone on for two weeks straight in New York and have recently moved to San Francisco and other parts of the country. Many media sources have summarily dismissed the group, as you can see in the following video, but that isn't taking any steam away from the demonstrations.
Use proven market tools to determine whether it's truly safe.
By Tom Aspray, MoneyShow.com
Most investors have heard the phrase "buy the dips" from the financial pundits when the stock market has been in a well-established uptrend.
But to most, a dip is quite a vague term and it means something different to a fundamental analyst than it does to a technical analyst. This was illustrated in a recent column in The Wall Street Journal by Jason Zweig titled Why Buying on the Dips Isn’t All It’s Cracked Up to Be.
In a nutshell, Zweig looks at how buying on a 2% or a 5% market correction impacted the performance when compared a single purchase over a ten-year period. I think his conclusion misses the point, however, as to most traders or technical analysts, buying the dips generally refers to a specific issue, and not the market as a whole.
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Intel's shareholders are excited that Intel will ship four times more tablet microprocessors than last year because it may mean a higher dividend is coming.
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- Gold and silver futures were just modestly lower in overnight/early morning trade, but dropped sharply following the jobs report.
- Apr gold is now -1.4% at $1333.30/oz and May silver is -3.2% at $20.88/oz
- Copper futures, on the other hand, have been sliding lower since the overnight session and just hit a new session low of $3.11/lb.
- Since China is the largest importer of copper in the world, news that China saw its "first" corporate bond default, ... More
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