Sell-off may continue, but don't panic
Sell-off may continue, but don't panic

Experts say that the recent market action feels 'more like a repositioning,' and that it won't stop anytime soon.

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A diversified portfolio is a must, right? Not for most people, says investor Mark Cuban.

By Kim Peterson Aug 15, 2011 4:12PM
Oh, sure, it sounds great to have a diversified portfolio. That's one of the golden rules of investing. But what does that even mean, and can the average investor pull it off?

Investor Mark Cuban, who also owns the Dallas Mavericks, says it's impossible for most people to diversify because it's simply too hard to learn about all the different categories.

You're supposed to invest in what you know, right? Well, how can you invest in what you know but then spread your investments into emerging markets, real-estate investment trusts, small-cap stocks, dividend-paying stocks and bonds? 

Your brain meets your money.

By Motley Fool Pick of the Day Aug 15, 2011 3:46PM

By Morgan Housel

 

After being burned by one of the worst investment bubbles in history, Isaac Newton reflected. "I can calculate the movement of the stars, but not the madness of men."

 

That's just as true today. It doesn't matter how smart you are. You'll be broke before long if you don't have the right mind-set. As markets continue to bleed investors dry, all of us would do well to stop, take a deep breath, and spend a few minutes thinking about some of the innate biases that lead investors astray.

 

Here are three.

 

Economist Nouriel Roubini says 5 factors helped turn the nation's economic surplus into a deficit during Bush's presidency.

By Kim Peterson Aug 15, 2011 2:32PM
One well-known economist says that former President George W. Bush is to blame for the current economic crisis.

Nouriel Roubini, a New York University professor nicknamed "Dr. Doom" for his dour views on the economy, says in this video that when President Obama came to power, he inherited a budget deficit of $1.2 trillion. When Bush came to power, the country had a surplus of $300 billion.

How did we get a $1.5 trillion change in our fiscal condition during Bush's time in office? Roubini lists five factors:  

These exchange-traded funds allow investors to play this market for its strengths and weaknesses.

By TheStreet Staff Aug 15, 2011 1:31PM


TheStreetBy Don Dion, TheStreet

 

Here are five ETFs to watch this week.

 

1. iShares Dow Jones Select Dividend Index Fund (DVY)

 

The global markets' whipsaw action over the past week has injected a hearty dose of fear into investors around the world.

 

While it may be tempting to flee these markets, I encourage investors to avoid taking brash action. Defensive-minded asset classes like dividend-paying equities, gold and safe-haven currencies will allow investors to not only weather the current storms, but also prepare for the market's eventual turn around.

 

The Big Mac Index suggests a new long-term trend for the yuan while the US dollar tries to bottom. These ETFs could make good alternatives to stocks in this volatile market.

By MoneyShow.com Aug 15, 2011 12:18PM
By Tom Aspray, MoneyShow.com

Since 1986, The Economist has published the “Big Mac Index,” which strives to determine the correct value of the major currencies based on purchasing power parity, or PPP. Its underlying principle is that a dollar should buy the same amount in all countries, and the McDonald’s Big Mac is used to represent a basket of goods.


I have always found the index quite interesting, and the latest results were released late last month. Though I doubt anyone uses the data to trade currencies or currency ETFs, year after year, there are some interesting trends.
 

Professional money managers say almost every stock is worth considering now as the market gyrates with every new economic report and development.

By TheStreet Staff Aug 15, 2011 11:49AM

TheStreet

By Robert Holmes, TheStreet

 

Individual investors have been increasingly fearful as they grapple with wild swings in the stock market. Professional investors, on the other hand, say there are plenty of value stocks for folks who can stomach the risk.

 

The Dow Jones Industrial Average ($INDU) has swung wildly this month, but with many stocks trading at only 11 times earnings in a near-zero-interest-rate environment, professional investors are turning greedy while the masses have become fearful.

 

Brian Frank, the manager of the Frank Value Fund (FRNKX), says the valuation of his portfolio was the cheapest ever heading into second-quarter earnings, and that includes during 2008 and 2009, when share prices plummeted in the heart of the deep recession. "Guess what. Now it's even cheaper," he says. "The fundamentals are still getting stronger, even if there is economic weakness in the future."

 

High hopes for companies like Facebook, Zynga and Twtter have individual investors looking to get in ahead of their public trading debuts.

By TheStreet Staff Aug 15, 2011 11:46AM

the streetBy Joe Mont, TheStreet


Are you upset you didn't get in on the LinkedIn (LNKD) and Pandora (P) IPOs? Not just because you passed on their public offerings but because you didn't have a horse in the race before they went public?

 

For the most part, private investing in pre-IPO companies has been an exclusive and expensive club, limited mostly to financial and venture capital firms or very wealthy individuals. Facebook, for example, announced earlier this year that it was offering up to $1.5 billion of securities to clients of Goldman Sachs (GS), provided they invested at least $2 million and pledged to hold the shares until 2013.

 

Increasingly, however, smaller investors are looking for ways to hop the fence and join the party, especially given the hot prospects of several well-known Web-based and social-media-focused companies.

 

Doing so is easier said than done.

 

The discount giant is losing its reputation as the low-price leader. If it doesn't stand for bargains, what is the company's strategy?

By TheStreet Staff Aug 15, 2011 11:19AM

By Jeanine Poggi, TheStreet

 

Wal-Mart's (WMT) crown as the low-price king has been tarnished.

 

The discount giant, which prides itself on its motto of "Save Money, Live Better," appears to have lost its price perception among consumers. According to a survey conducted by WSL Strategic Retail, 86% of Wal-Mart shoppers no longer believe the retailer has the lowest prices.

 

"Every brick-and-mortar retailer lowered prices and shouted sales throughout the recession, while the Internet became the go-to place for shoppers in search of the lowest prices," the report said.

 

This raises a serious conundrum: If Wal-Mart no longer stands for everyday low prices in the eyes of consumers, what does it stand for?

 

As fear subsides, look for a recovery.

By Jamie Dlugosch Aug 15, 2011 10:05AM

Wow, what a ride. Stocks go down 600 points one day, up 500 the next, only to give it all back the day after. Friday’s calm 125 point increase on the Dow was like a walk in the park.

 

Too bad it left us a bit short of break even for the week. Oh well, I suspect most investors will take the small loss as some sort of victory. They should be cheering all the way to the bank.

 

The intense volatility has created one of the best trading landscapes in recent years. Dare I say day trading is making a come back? Why not when you can make 10, 20 or even 30% on a stock trade in one day?

 

If you can remove the fog of nonsense from the discussion, you will find plenty of reasons to want to own stocks, even for the long term. The ETF I would own this week is the iShares S&P North America Technology and Multimedia Fund (IGN).

 
Tags: etf

The deal could make Android smartphones the standard and knock Apple's iPhone from its perch.

By InvestorPlace Aug 15, 2011 9:31AM

By Jeff Reeves, editor of InvestorPlace.com


Google (GOOG) isn't afraid to go on shopping sprees. With more than 75 acquisitions since 2006 -- including the $3.1 billion buyout of DoubleClick to bolster its online advertising presence, and  the $1.65 billion buyout of YouTube -- the cash-rich tech giant has made these deals a normal part of its growth plans.


But Google's plan to snatch up Motorola Mobility (MMI) for about $12.5 billion is by far the most dramatic in the history of the company. The partnership, announced Monday, could forever change the makeup of Google and the landscape of the smartphone business, and it might finally create a gadget that can give Apple (AAPL) and its iPhone a run for their money.

 

Just because everyone expects a downturn doesn't mean it's going to happen.

By Jim Cramer Aug 15, 2011 9:10AM

jim cramerthe streetIs it grudging recognition that, despite the political gridlock, despite the European woes, maybe not all is lost?

 

Have we discounted not just a slowdown but also an actual recession, one that might not occur? Could this be a repeat of 1987, when the market's decline presaged nothing other than a momentary loss of consumer confidence?

 

It's hard not to think about that when in the past 36 hours of trading we've had decent employment claims and some really good numbers from retailers Ralph Lauren (RL), Macy's (M) and Nordstrom (JWN), not to mention aggregate retail sales numbers.

 

It's hard not to question the recession thesis when Caterpillar (CAT) comes on national television and says orders are looking good, knowing that CAT is about emerging markets, not the U.S. and not that much about Europe.

 

Traders can make still make money as this 13% winning trade in a down market demonstrates

By Jamie Dlugosch Aug 12, 2011 5:09PM

When I trade stocks that are about to release earnings, I identify my picks over the weekend before the company in question is scheduled to report results. This past weekend was particularly challenging given the horrific state of affairs in the market.

 

Like the majority of those participating in the market a certain degree of fear clouded my vision. For a brief moment I considered cancelling trading this week given the volatility in the market. Given that all of my trading recommendations for my subscribers are long positions, downward velocity for 99% of the market did not bode well for my picks.

 

In the week prior, I made a handful of recommendations. My analysis of these picks was dead on. The companies traded reported strong results with positive guidance for the future. It should have been a big week to make money. While I did make money on two of the four trades, the other two picks were negative with one being down 10%.

 

The two winners did offset the losers making the total loss only a fraction, but the crushing losses of the last two picks combined with the negative environment had me worried. Was now the time to go bottom fishing and buy stocks?

 

Wall Street was given plenty of warning, and now the SEC may be looking into who knew what and when.

By Kim Peterson Aug 12, 2011 2:27PM
Standard & Poor's downgraded the U.S. credit rating late last Friday, and the news wasn't much of a surprise. Wall Street had heard a rumor early on that the downgrade was coming. News sites reported the rumor all day.

Unless it was all a huge coincidence, it's likely that someone in the know leaked the information. The questions are who and whether the leak led to early insider trading.

That's what the Securities and Exchange Commission is reportedly investigating. The SEC has asked Standard & Poor's to disclose who exactly knew about the downgrade before it was announced, the Financial Times reports. It's the start of a preliminary look into potential insider trading. 

Apple and Amazon have held up well despite heavy market volatility. Favorable chart patterns make each a good buy on an upcoming pullback.

By MoneyShow.com Aug 12, 2011 11:39AM
By Tom Aspray, MoneyShow.com

It has been a wild week in the markets, and the ranges in the stock index futures have been incredible. More fireworks are possible on Friday, and while overseas markets are showing nice gains a few hours before the NYSE opening, that does not tell us much about the close.

With two sharp up days and two sharp down days so far, Friday’s close will break the tie. All of the major averages and their respective ETFs closed Thursday well off the week’s worst levels. The Nasdaq 100, as represented by the Powershares QQQ Trust (QQQ), has acted the strongest, and the strength in Cisco Systems (CSCO) helped the market early Thursday.

Since the close on July 22, QQQ is down 8.2% versus a 12.8% drop by the financial-heavy Spyder Trust (SPY), which tracks the S&P 500. The SPDR Diamonds Trust (DIA), which follows the Dow Industrials, is down 12.2% during this time.

Two of the best-known tech bellwethers, Apple, Inc. (AAPL) and Amazon.com (AMZN), have held up even better, but is this important?
 

The yellow metal and companies that mine it remain in a bull market.

By TheStreet Staff Aug 12, 2011 10:31AM

Image: Gold Bars (© Photodisc/SuperStock)By Frank Byrt, TheStreet

 

Standard & Poor's is recommending gold and gold miners as top investment picks only days after downgrading U.S. Treasurys, which sparked a firestorm in financial markets worldwide that boosted the price of the precious metal.

 

S&P's Equity Research Services unit, which made the recommendation, is independent of the firm's Ratings Services division, which lowered its long-term credit rating on the U.S. to AA-plus from triple-A with a long-term negative outlook last week.

 

Gold futures tumbled Thursday after CME Group, the owner of the world's biggest futures market, increased margins on gold contracts by 22%. Gold had soared 8% in the previous three days, bringing a one-year gain to 49%, on U.S. and European debt concerns and a slowdown in global economic growth. Haven investments such as gold, Treasurys and the Swiss Franc have benefited the most.

 

"We believe that gold is in a bull market," S&P analyst Leo Larkin wrote in a research note, because demand will outstrip supply "for the foreseeable future."

 

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[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.

This morning, the market was provided a basis to rebound with the July employment report, which was just right for the policy doves (209K versus Briefing.com consensus 220K). It showed payroll growth that was weaker than expected, ... More


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